Charlie Ergen’s Dish satellite-TV service is getting a nice boost from an unlikely ally: big cable.
Wall Street lauded Ergen as a “wireless power broker” yesterday in the wake of Verizon Wireless’ $3.6 billion deal to buy licenses for mostly unused spectrum from a trio of cable companies at a more than 50 percent markup.
The companies — Comcast, Time Warner Cable and Bright House Networks — also agreed to market each others’ services in a big show of cooperation.
Ergen’s Dish has been on a major spending spree in recent months, buying up nearly $3 billion worth of wireless spectrum through bankruptcy auctions.
The move has had analysts scratching their heads. Some suggested Ergen planned to launch his own wireless network, while others said he could sell the spectrum at an eventual profit.
The Verizon deal makes the latter option that much more attractive, as it nearly triples the value of Ergen’s spectrum licenses, which analysts say are now worth as much as $10 billion.
The deal also changes the competitive landscape for Verizon’s rivals and ratchets up speculation about who may want to partner with Dish in order to compete.
AT&T and DirecTV have been bandied as possible partners for Dish. AT&T is facing a $6 billion breakup fee as a result of its crumbling deal to acquire T-Mobile.
Ergen’s Dish, the satellite pay-TV company, and EchoStar, which holds the satellite interests, both jumped yesterday as the market sorted out the spectrum haves from the have-nots.
Spectrum scarcity is a big concern for anyone providing broadband services, as consumers are increasingly using phones and other mobile devices to watch Netflix and other video content in addition to making calls and sending photos.
“In the future, spectrum buyers will have to negotiate a deal with the likes of Charlie Ergen and Dish Networks, whose strategic value has risen dramatically over the past week,” Walter Piecyk, an analyst with BTIG, said in a report.
Bernstein Research’s Craig Moffett said in an investor note: “Dish would now seem a more likely partner for T-Mobile, which will be even more desperately in need of spectrum if the AT&T deal crumbles, and Dish could potentially be a logical partner for AT&T as well.”
Dish stock rose 6.6 percent yesterday to close at $26.21.
