December 20, 2019 | CNN Wire
Dish Network Chairman Charlie Ergen believes his company could be a significant competitor in the US consumer wireless business.
Ergen testified over two days this week in support of the merger of T-Mobile and Sprint, which is currently being challenged in federal court by a group of state attorneys general. The companies say the merger is necessary to build out a nationwide 5G network and because Sprint could struggle to survive on its own. But the states say consolidating the market will reduce competition and will probably raise prices for consumers.
The merger stands to be one of the most consequential in the history of the telecommunications industry, and the trial is its final hurdle. The combination was approved earlier this year by the US Department of Justice and the Federal Communications Commission after Dish agreed to acquire assets from Sprint and enter the wireless market, a move intended to reduce potential anticompetitive effects from the merger.
If T-Mobile and Sprint win the suit and the merger is allowed to go through, Dish would be poised to buy Sprint’s Boost Mobile prepaid brand. It would also buy a block of wireless spectrum — the radio frequencies that wireless signals travel over — from Sprint. As part of the deal, Dish would have a seven-year agreement with T-Mobile that would allow Dish customers to be serviced on the T-Mobile network while it builds out its own network.
“We will compete with the largest wireless operators in the United States and we will compete from day one,” Ergen testified.
But there are questions about whether the satellite provider could really become a viable competitor to what — post-merger — would be three similarly-sized wireless giants: AT&T, Verizon and the “New T-Mobile” (AT&T is CNN’s parent company).
Nonetheless, Ergen’s testimony excited Dish investors. The company’s stock jumped from $34.47 at close on Tuesday, the first day of Ergen’s testimony, to open at $36.05 Wednesday.
“This isn’t some fantasy for us,” Ergen said. “We’ve wanted to get into this wireless business for the past 10 years. I’ve worked on it darn near every day. Now, the stars have aligned to allow us to do this and we know we can compete.”
Propping up a fourth competitor
Ergen’s testimony shed some light on how the merger deal, with Dish as a remedy, came together. Initially, he said, he opposed the combination.
Dish has wanted to enter the wireless market for a decade, spending around $12 billion on earlier wireless spectrum purchases and promising the FCC that it will have a nationwide 5G network by 2023…
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