28 October 2016
T-Mobile chief executive John Legere will become the CEO of the merger with Dish Network. Photo: Bloomberg
T-Mobile chief executive John Legere will become the CEO of the merger with Dish Network. Photo: Bloomberg

Dish, T-Mobile in multibillion-dollar merger talks

Dish Network Corp. is in talks to merge with T-Mobile US Inc. in a deal that would combine the second-largest satellite TV operator in the United States with the fourth-largest wireless carrier, the Wall Street Journal reported, citing people familiar with the matter.

The two sides have agreed that Dish chief executive Charlie Ergen will become the combined company’s chairman while his T-Mobile counterpart, John Legere, will serve as the CEO, the newspaper said.

However, the purchase price and the mix of cash and stock for the deal are still being discussed, it said.

One of the sources told the Journal that the talks were still in the “the formative stage” and it is possible that a deal might not be completed.

But if it is completed, the deal would be the latest multibillion-dollar combination in traditional television and communications industries being upended by the internet.

T-Mobile rival AT&T Inc. is close to wrapping up its US$49 billion deal for Dish rival DirecTV that will create the country’s largest pay-TV company. Meanwhile, Charter Communications Inc. recently announced a combined US$67 billion worth deals with Time Warner Cable and Bright House Networks to create the second-largest US cable operator.

T-Mobile has a market capitalization of about US$31 billion, slightly below Dish’s US$33 billion.

The newspaper said a deal would address major strategic issues for both sides.

Dish lacks the robust broadband internet service that cable companies can lean on to offset a declining TV business. It also has amassed billions of dollars of wireless licenses but hasn’t built the cellular network needed to put them to use. T-Mobile’s wireless service would help address both needs.

T-Mobile, on the other hand, has added subscribers at a fast clip over the past several quarters, but still is dwarfed by much bigger rivals AT&T and Verizon Communications Inc. Dish’s wireless licenses would give T-Mobile a path to boosting the capacity of its network.

T-Mobile has about 44.7 million retail customers, which includes mainstream and prepaid customers. Dish has 13.8 million satellite TV customers and 591,000 Internet subscribers.

Deutsche Telekom owns 66 percent of T-Mobile and has for several years been looking to either sell the company or merge it with another.

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