DISH Network Joins Forces with Sprint

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Yesterday, DISH Network Corp. (DISH) together with Sprint Corp. (S) announced that the two companies have decided to jointly develop and deploy a fixed broadband network in Corpus Christi, Texas. The network is expected to start from mid-2014 on a trial basis. If successful, then the two entities may further extend the broadband network to other areas.

The service will run on Sprint’s 2.5 GHz spectrum for 4G Long Term Evolution Time Division Duplex (LTE TDD) network. DISH will provide either a ruggedized outdoor router or an indoor system to bring broadband to the site. DISH will also provide skilled manpower for installing equipment in customer premises. Sprint stated that the network will initially provide download speed of 50-60 Mbps, which can go up to 2 Gbps over time.

DISH, the second largest satellite TV operator in the U.S., has constructed an extensive wireless/satellite spectrum base over the last couple of years. We believe DISH’s attempt to enter into the wireless market is a diversification strategy to counter pay-TV market saturation. DISH Network enjoys the opportunity to collaborate with several established telecom or tech companies to jointly set up a wireless network.

Earlier this year, DISH failed in its attempt to acquire Sprint, the third largest telecom operator in the U.S. Current rumors in the industry suggest a possible merger between the two major satellite TV operators, namely, DISH and DIRECTV (DTV).

On Jun 17, 2013, DISH and NTELOS Holdings Corp. (NTLS) jointly started providing fixed-mobile broadband network to offer high-speed Internet service to areas served by NTELOS. These include Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky. NTELOS provides wireless towers and other hardwires whereas DISH provides the valuable wireless spectrum licenses. Currently, DISH has a Zacks Rank #3 (Hold).

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