NEW YORK (TheStreet) -- Dish Networks (DISH) - Get Report may finally have an answer to what it plans to do with all the wireless spectrum that CEO Charlie Ergen has amassed in recent years. And T-Mobile (TMUS) - Get Report may finally have the means to compete better nationally with Verizon (VZ) - Get Report and AT&T (T) - Get Report.

Dish was surging 7.2% to $75.89 on Thursday following a report by The Wall Street Journal that the two companies are in talks for a merger. But share price appreciation is nothing new for Dish investors: the stock has gained a gaudy 253% over the past five years. 

T-Mobile US was also gaining on reports of a deal, rising 4.2% to $39.89, extending its five-year advance to 128%.

The talks, which the Journal described as in a "formative stage," are centered around the always prickly issue of price, and how to pay for the transaction, i.e. the mix of cash and stock necessary to consummate a deal. As for running the company, Ergen, 62, would most likely become chairman and T-Mobile US CEO John Legere, 56, would assume the duties of chief executive, the Journal reported.

For Dish, a deal with T-Mobile would provide the mobile component that Ergen has long coveted. And T-Mobile would get the spectrum that it needs to compete with Verizon and AT&T. Ergen has been aggressively acquiring spectrum in recent years, and a merger with T-Mobile would give a combined company a larger wireless network than either Verizon or AT&T, according to Walt Piecyk, a telecommunications analyst at BTIG.

Ergen, like most everyone in media, recognizes that the future of the business is mobile video.

Television from the family living room, though a profitable business, is declining as younger viewers make mobile devices their primary means of watching video and communicating through social media. Marketers, eager to win brand loyalty early in a consumer's life, are following them to mobile.

A merger with T-Mobile would allow Dish to offer the full array of Internet-based services along with its fast-growing "skinny-bundle" service, Sling TV. T-Mobile would get access to the more than $60 billion in wireless spectrum that Ergen has acquired in recent years. That increased spectrum would allow T-Mobile to offer Internet, pay-TV and phone services -- the so-called triple-play" -- to compete with Verizon and AT&T.

"The assets are very complimentary," Roger Entner, founder of Recon Analytics, an industry consultancy, said in a phone interview. "Dish brings spectrum and gets a very aggressive wireless partner, which could then offer a more robust triple-play.  It also gets Dish out of the death of linear television." 

A deal between Dish and T-Mobile roughly mirrors its rival DirecTV's (DTV) merger with AT&T.Both satellite-TV operators realized they needed a wireless option, and in the coming months, both services may have one. Federal regulators are expected to make a decision on AT&T's $48.5 billion merger with DirecTV in the coming weeks.

A merger with Dish would mark yet another step in T-Mobile's expansion into the U.S. The mobile carrier, which is 66% owned by Germany's Deutsche Telekom (DTEGY) , entered the U.S. market in 2001 when it purchased VoiceStream Wireless, which later changed its name to T-Mobile USA.

T-Mobile has long struggled to take market share from Verizon and AT&T. As a merged company, T-Mobile could combine its 44.7 million customers with Dish's 13.8 million satellite-TV customers and 591,000 Internet subscribers. Ergen's spectrum would give the combined company the network to expand its services and grow its customer base.

Dish would also have access to selling its products, including the Internet-based television package Sling TV, at T-Mobile's retail stores. 

Consummating the deal, however, will ultimately depend on whether Ergen and Legere can envision working together. Each are known in the usually button-up cable-TV industry as mavericks, rebels who don't fit the typical portrait of corporate CEO. Ergen has come close to merging his company in the past, but talks have always fallen apart. 

But both executives and their companies need partners to compete in an industry that is fast integrating services that historically stood separately. In addition, both Dish and T-Mobile are comparatively smaller players in their respective sectors, and each could arguably benefit from a a merger.

"Looking at the fundamentals, this deal makes sense," Entner said. "But putting Legere and Ergen in one organization will be such an explosive mix. We don't know if they will blow up the competition, or each other."