T-Mobile and Dish Network Merger Smells of Desperation

NEW YORK (Real Money) --It looks like the M&A wave is continuing, with the report in Thursday's Wall Street Journal that Dish Network  (DISH) and T-Mobile USA  (TMUS) are in discussions to merge. "Discussions" means they are attempting to hammer out a deal; there are scant details, and there is a possibility, no matter how remote, those talks could collapse with nothing done.

Let the failed merger between Comcast  (CMCSA) and Time Warner Cable  (TWC) serve as a reminder that just because two companies are talking, for various reasons a transaction may not occur.

If consummated, the merger would continue the wave of telecom deals over the last several months that has included AT&T's  (T) $49 billion deal for DirecTV  (DTV) and Charter Communications' (CHTR) announced total of $67 billion in deals that would roll up Time Warner Cable and Bright House Networks to create the second-largest U.S. cable operator. Continued success for investment bankers who would stand to collect a slew of fees, but when we really think about it, what other choice did these two companies have?

T-Mobile USA is the fourth largest wireless carrier, and Dish is the country's second largest satellite TV operator. Neither is exactly the best of breed or the pole position leader in their respective industries. If we look at the shifting landscape in which their competitors, such as AT&T, Verizon Communications  (VZ), and Comcast have been offering telephony, entertainment, mobile and high speed Internet, T-Mobile US and Dish were akin to the stragglers at a near ending game of musical chairs. It's looking like Sprint  (S) could be the lone player standing when the music stops.

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