Dish says it can offer Sprint tech advantages that SoftBank can't
Dish can provide LTE over a rooftop antenna to bolster home broadband services
Computerworld - Dish Network's offer on Monday to buy Sprint for $25.5 billion includes strategic and technology advantages SoftBank doesn't offer in its rival $20 billion bid for a 70% stake in the carrier, the satellite service provider claims.
Whether SoftBank will update its October bid for Sprint is not yet known.
Dish's spectrum holdings and superior technology would help the combined firm better take on the biggest wireless rivals, Dish Chairman Charlie Ergen said in a call with analysts.
"Dish-Sprint will be a superior company, combining the third largest wireless carrier [Sprint] with third largest pay TV provider," he said, adding that the combined firm could "become maybe number 2 or even number 1."
Sprint, the third largest U.S. wireless carrier with 47.5 million customers, said Monday it is evaluating the Dish offer and wouldn't comment further. Dish has 14.2 million satellite TV customers.
SoftBank could not be reached for comment on the Dish offer.
Dish proposes that a combined firm could offer future customers video, broadband and voice services that function in- and out-of-home.
The main technology difference that Dish can offer Sprint -- and SoftBank can't -- is 45 MHz of wireless spectrum that Dish has spent more than $8 billion acquiring in recent years, Ergen said.
Dish could deliver a rooftop antenna for fixed wireless broadband Internet connections over LTE using the high-power 700 MHz band.
Under the proposal, Dish would also continue to offer video services via satellite using its own satellites and call centers, while providing mobile wireless services through Sprint's existing network, which is now evolving to LTE.
Ergen described the future Broadband Internet market for a Dish-Sprint company as about 35 million homes nationwide where residents could use an outside antenna to connect to advanced LTE antennas.
"With the antenna on the outside of the house, you would get a lot of gain and speed ... [and] it would be very, very economical," Ergen explained. "We don't see this as being a superior product to FIOS or cable modems in densely populated areas."
The 35 million homes cited by Ergen are located in smaller cities with 100,000 or so residents, in the outer ring of bigger cities that are "unserved and underserved ... and are not likely to see competitive broadband opportunities," Ergen said.
Analysts said the proposed fixed broadband strategy for Dish-Sprint makes sense.
"Since Dish was founded in 1980, its customer niche was always the outlying areas and places where cable hadn't run, places like trailer parks and low- to middle-income areas," said Gartner analyst Bill Menezes.
Satellite TV companies have not had much success in offering Internet connections, since satellites can lose connections during heavy storms, he noted.
Menezes said that Dish TV customers would probably need to buy an added outdoor antenna to connect to LTE towers to make the broadband connection work.
Dish officials didn't respond when asked to comment on how the broadband would work, however.
Menezes and Phillip Redman, an analyst at Gartner, said it isn't clear how far SoftBank would be willing to go yo out-bid Dish, or whether Sprint will entertain the Dish bid at all.
Ultimately, Menezes said that the Dish offer may pressure Softbank and Sprint into a partnership with Dish.
"The Dish deal is definitely better for Sprint than SoftBank's in the sense that Sprint could realize huge spectrum gains, while all it it gets from SoftBank is money and new management ideas," Menezes said.
The most affected customers in the deal would be existing Dish customers, Menezes added. "I don't see mobile service customers necessarily flocking to Sprint just because of a Dish tie-in," he said.
Both AT&T and Verizon have had offerings that tied in to Dish and DirecTV before, but they were not a big customer draw.
Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed . His e-mail address is email@example.com.
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