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Dish Network's Earnings Revive DirecTV Deal Talk

Dish Network has played a front and center role in wireless industry consolidation, which picked up pace with AT&T's failed $39 billion bid for T-Mobile USA in 2011 and recent multi-billion dollar merger efforts between T-Mobile and MetroPCS (PCS) -- and Sprint (S) and Softbank of Japan.

The key is that after stepping down as chief executive of the company he co-founded, Dish Network chairman Charlie Ergen has spent billions combing bankruptcy courts for spectrum assets, which have turned him to a key figure in wireless industry consolidation.

In August, TheStreet profiled Dish Network, large investors in the company and analysts on the possibilities for Ergen's wireless ambition

After a weak third quarter earnings report marked by falling average revenue per user and costs related to the company's Blockbuster acquisition, Bryan Kraft of Evercore Partners reiterated the boutique investment bank's 'overweight' rating on Dish Network shares and $41 price target, which hinges on a sum-of-the-parts analysis that assumes the company will either be sold or divest its spectrum assets.

Already, Ergen has hinted that he might revisit a merger with DirecTV, after the blocked 2002 effort hit the company's finances. As AT&T was seeking approval of its $39 billion T-Mobile merger bid, Ergen said a regulatory approval of that deal would pave the way for a Dish - DirecTV tie-up. "If that merger is allowed to go forward, then I don't think there'd be any problem with us merging with DirecTV," Ergen said a year ago, on a third quarter 2011 conference call with analysts.

Meanwhile, Hollywood Reporter reports DirecTV CEO Michael White said the company could wireless revisit a merger with Dish Network at Goldman Sach's Communacopia Conference in September, given the consumer benefits of a tie up.

Still some risks to M&A speculation remain. Bloomberg reported in June the Department of Justice has begun to look into pricing arrangements between Dish and DirecTV. Meanwhile, Dish recently settled a bitter carriage dispute with AMC Network, which some said raised the prospect that Ergen could fall out of favor with regulators who'd be key to any M&A efforts. Already, Ergen has complained a slow regulatory approval process has hampered the company's wireless efforts and given potential competitors like AT&T a big head start.

While Dish Network's M&A fortunes have changed dramatically since the summer amid a frenetic pace of carrier mergers, analysts continue to see the company as a key player in wireless industry consolidation. To be seen is how that might take form.

-- Written by Antoine Gara in New York

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