AT&T Looks to Rebound, May Try To Acquire Dish Network

Posted by · December 20, 2011 5:10 pm

After throwing in the towel on its plan to absorb T-Mobile USA yesterday, AT&T has reportedly already begun looking for someone else to fill the spectrum void that remains. Having become extremely desperate to meet that need, AT&T is now reported to have cast its eye on Dish Network. This comes as a bit of a surprise considering the opposition that the satellite TV company vocalized when the T-Mobile merger was still a possibility.

To make matters that much more awkward, the Wall Street Journal reported that Dish Network is interested in eventually making a move into the wireless market itself. In fact, Dish Network’s interest in entering the wireless market was contingent on the failure of the T-Mobile-AT&T merger, as CEO Joseph Clayton expressed last week that his company wants to partner with T-Mobile in that venture.

Speaking with Bloomberg earlier Tuesday, analyst Christopher King offered the following perspective: “Dish and AT&T aren’t direct competitors, and at the end of the day, the government wants to see spectrum used. It’s highly unlikely regulators would block two AT&T deals in a row.”

Though King may be right about the statistical unlikelihood of being denied a merger twice in a row, it is important to remember that AT&T was not officially denied its merger request. Rather, the telecom giant chose to withdraw its application in the face of considerable, though arguably necessary adversity, considering the potential ramifications of allowing the No. 2 and No. 4 largest wireless companies to merge. As such, it might not be as straightforward as he seems to think, especially as one considers the circumstances that surround the relationship between the two companies.

On the other hand, AT&T is running out of options. Claiming to be desperate for spectrum, AT&T literally has nowhere else to turn if Dish Network either turns down the offer or chooses to partner with T-Mobile and enter the wireless market for itself. In fact, Verizon’s 4G spectrum already dwarfs that of AT&T by a startling 56 percent.

That being said, it’s also important to note that Verizon is dealing with a Justice Department investigation of its own, the results of which could play a significant role in the way that this hectic market ultimately situates itself for the long run.

Meanwhile, the mere talk of what is at best an unlikely deal has already stirred the pot on Wall Street, with Dish and AT&T shares speculatively jumping 9.2 percent and 1.3 percent respectively for the day.