Dish Network Corp. chief executive Charlie Ergen said he will probably split the satellite-TV provider’s video business from its spectrum holdings, signaling he may give up on his ambition to become a wireless competitor.
Ergen blamed the government’s unwillingness to give Douglas County-based Dish a possible $3.3 billion discount on airwaves payments.
Without the discount, Dish can’t compete with phone giants AT&T Inc. and Verizon Communications Inc. in future spectrum auctions, Ergen said Wednesday on the company’s earnings conference call. And if Dish can’t compete, it’s in shareholders’ interest to sell or lease the current spectrum, he said.
The government’s lack of support is dissuading Dish from pursuing big takeover deals, which would be the company’s best long-term option, Ergen said.
Bloomberg reported last month that talks with T-Mobile US Inc. on an acquisition had stalled.
Dish is awaiting a decision from the Federal Communications Commission about the discount, which was the biggest hurdle to getting a deal done.
Ergen said he made a “mistake in judgment” thinking the FCC supported more wireless competition. The government implicitly supported a mobile duopoly between AT&T and Verizon, Ergen said. There were no restrictions on selling some of Dish’s spectrum to either AT&T and Verizon from a regulatory standpoint, the CEO said.
Ergen declined to give a specific value on Dish’s current spectrum holdings and said it was too early to know if the company, the second-largest U.S. satellite-TV provider, after AT&T’s DirecTV, would need to borrow money to pay the extra $3.3 billion.
Dish rose 4.1 percent to $68.09 at 2:16 p.m. New York time, after the company earlier reported sales that beat analysts’ estimates even as subscriber growth slowed. Through Tuesday, the stock had dropped 10 percent as investors wait for the company to find a strategy that can turn its spectrum holdings into profit.
