Dish chairman Charlie Ergen addressed the strategic options during a Tuesday, Aug. 6, investor call that featured questions from journalists as well as analysts.
Ergen addressed issues ranging from his pursuit of Sprint Nextel (S) and Clearwire (CLWR), to future M&A possibilities, and Philip Falcone's allegations of fraud in the LightSquared bankruptcy, in which Ergen is a creditor.
Following Softbank Corp.'s purchase of Sprint and Clearwire, Ergen acknowledged, T-Mobile USA is the last wireless carrier that Dish could purchase. "You just looked at a full blown acquisition and our merger and really that's probably only T-Mobile at this point in time," Ergen said.Dish could still negotiate a partnership or networking deal with Sprint and Clearwire, he said. The due diligence that Dish conducted for its bids for the two telecoms could serve as legwork for a partnership or networking deal with Sprint's new owner. "I don't know the Softbank executives at this point but they seem very innovative and creative and they certainly seem to be more aggressive than maybe some of the other people in the wireless business," Ergen said, "so I think there's a lot of similarities between the way we think and perhaps the way they think." Consolidation among cable operators and the increasing rates that content providers are charging could force Dish to look for other deal partners, though. "There's not any question that putting Dish and DirecTV together makes a lot of sense," Ergen said. There are strategic differences. Unlike DirecTV, Dish has been looking to get into wireless. It's possible that the market or regulatory issues would prove one of the satellite companies wrong. Ergen said he would give up his wireless ambitions if he saw they could not succeed. "We aren't suicidal about it," he said. The U.S. Department of Justice rejected a combination of the satellite TV companies a decade ago, but Ergen suggested that the market has changed. Phone companies including AT&T (T) and Verizon Communications (VZ) have entered pay-TV and are growing. And, of course, Netflix (NFLX), Hulu and Amazon (AMZN) have emerged as major video players.
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