Dish bows out of battle with Sprint over Clearwire

Wed Jun 26, 2013 6:52pm EDT
 
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By Liana B. Baker and Sinead Carew

(Reuters) - Dish Network Corp (DISH.O: Quote) has bowed out of the battle for mobile service provider Clearwire Corp CLWR.O, marking the second major blow in less than a week against Dish chairman and founder Charlie Ergen and his plan to expand into wireless.

The decision, announced on Wednesday, officially put an end to a bidding war between Dish and Clearwire's majority owner Sprint Nextel Corp (S.N: Quote), and raised questions about what options Ergen has left in as he tries to expand beyond satellite TV services into the U.S. wireless market.

Dish was driven out by Sprint's increased offer for Clearwire the week before. Sprint's offer of $5 per share trumped the $4.40 per share proposal from Dish and won the support of a key group of dissident Clearwire shareholders.

Analysts and investors have been questioning what kind of deal or partnership Ergen will look for next. Several analysts have said his best option could be to make a bid for No. 4 U.S. mobile provider T-Mobile US Inc TMUS.N, whose majority shareholder is Deutsche Telekom AG (DTEGn.DE: Quote). Dish declined to comment on the prospects for a T-Mobile deal or on its future plans for wireless.

"It's an option," said a source familiar with the matter, referring to a T-Mobile US deal.

But the person, who asked not to be named, added that T-Mobile was not the only possible partner. The source noted that Ergen has always said he would pursue all of his options.

As recently as 2011, Deutsche Telekom tried to leave the U.S. market and some analysts saw the merger of T-Mobile USA with smaller U.S. company MetroPCS earlier this year as another possible step towards an ultimate exit.

Dish has already invested more than $3 billion to buy its own wireless airwaves, but it has no experience building wireless services or competing with large rivals such as Verizon Wireless (VZ.N: Quote)(VOD.L: Quote) and AT&T Inc (T.N: Quote).   Continued...

 
People walk past a Sprint store in New York December 17, 2012. REUTERS/Andrew Kelly