T-Mobile Threatened by Dish’s Plans
Recently, T-Mobile and Sprint’s controller, Deutsche Telekom, argued on limiting the ability of Dish to sell its percentage to strategic investors. However, the limitations of Dish will only be minimal, given the pushback of the Department of Justice for a strong fourth player.
In addition to that, Dish will probably be free to sell its equity stake in its wireless business to investors the company sees to fit. And this will mean that Ergen, in the coming year or two, can acquire a partner with a large balance sheet. As a result, the additional capital will support Ergen to create a 5g wireless network. At the same time, its network-sharing agreement with T-Mobile abates.
Aside from that, the incentivized Dish will offer services with lower prices compared to T-Mobile, AT&T, and Verizon to obtain subscribers. Moreover, the firm will start with zero subscribers and no average revenue per user to grow for investors. And due to this reason, it will surely be in its full customer addition mode. Actually, this was the strategy of T-mobile for years, to cheapen on price and charges for going over data limits after failing to sell to AT&T in 2011.
The Merge of T-Mobile with Sprint
Until now, T-Mobile does not have any idea on Dish’s plans. And it is starting to worry that it may be enriching an intelligent, highly motivated competitor. On the other hand, instead of doing nothing, Deutsche Telekom still wants a merger with Sprint.
And this week, everyone expects approval from the Department of Justice. However, there is still no assurance that T-Mobile and Sprint will successfully merge. And the hurdle will be the lawsuit from 13 state attorneys general and the District of Columbia. Also, they are the ones who sues to block the deal on anti-competitive grounds.
Then, Dish has a chance to be a national provider of bundled video and wireless service.
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