Sprint and Dish Network Bury the Hatchet

Telecom & Wireless

Published: December 17, 2013 11:40 am

Last Updated: April 28, 2020 5:22 am

Dish Network Corp. (NASDAQ: DISH) did all it could, first to acquire Clearwire, then to prevent SoftBank from acquiring a majority position in Sprint Corp. (NYSE: S). Neither plan worked out, but the two companies announced Tuesday morning that they would now cooperate on a trial to develop and deploy a fixed wireless broadband service in Corpus Christi, Tex., by the middle of next year.

Of the two partners, Dish may need this trial to succeed more than Sprint does. The satellite company has sought a way to grow, and chairman Charlie Ergen has been buying up wireless spectrum in order to drive new growth. It is too bad for Dish that the trial with Sprint will use the 2.5 GHz spectrum that Sprint acquired from Clearwire.

Following its acquisition of Clearwire, Sprint’s spectrum holdings are larger than those of AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) combined. It has to put that spectrum to work or the Federal Communications Commission could revoke its licenses. Dish and Ergen probably have decided that they will make a side-bet with Sprint until a decision is reached on what happens with LightSquared’s 40 MHz of spectrum that Ergen tried to nab by bidding on LightSquared’s debt. Whether that will succeed remains to be litigated.

Shares of Sprint were up about 2% Tuesday morning, at $8.48 in a 52-week range of $5.61 to $8.88. Remember that this stock is essentially a tracking stock for SoftBank now.

Dish Network shares were up about 1.2%, at $54.30 in a 52-week range of $33.79 to $55.37.

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