Dish Eyes LightSquared’s Wireless Spectrum

Dish Network is offering US$2 billion for some of LightSquared’s spectrum in a move that could help the company expand its offerings beyond pay TV.

The offer, first reported by Bloomberg, would add spectrum to Dish’s growing supply of airwaves. LightSquared, the bankrupt wireless network company funded largely by billionaire Philip Falcone’s Harbinger Capital Partners, would use the capital to pay off debt.

The companies have not confirmed or commented on the offer, which would be subject to regulatory approval.

Neither Dish nor LightSquared responded to our request to comment for this story.

Going for Broadband

Dish’s bid is an indication that the company is serious about expanding its offerings beyond the living room. Since receiving FCC approval last year to set up wireless services, the company has made recent moves to acquire wireless spectrum that would allow it to roll out its offerings to mobile consumers.

“This confirms what we have been saying for a while now,” Joel Espelien, analyst with TDG Research, told the E-Commerce Times. “Dish has concluded that the future is broadband, not pay TV, and spectrum is the only way they are going to get there.”

That means there might be more aggressive bids like the LightSquared one in the future from Dish, said Espelien.

“They are going to have keep bidding like this until that future is secured,” he noted.

Those efforts to form partnerships within the industry also seemed apparent last month when the satellite provider offering to buy Sprint for $25.5 billion.

Dish’s offer, despite being unsolicited and somewhat of a surprise, nonetheless followed the trend of consolidation in the wireless industry. The major carriers like Sprint can’t just sell consumers on solid phone connections anymore. They also have to convince potential customers that they have the fastest and most reliable data connections for smartphone users who want to play games, watch movies and download apps.

Dish claims that’s why its bid on Sprint is better than SoftBank’s. The company is hoping that its technical advantages, such as using its satellite capabilities to improve video usage on mobile devices, can help sweeten the potential deal with Sprint.

Waiting Game

It’s difficult to determine how the LightSquared bid would affect the Sprint offer, said Ritch Blasi, senior vice president of mobile and wireless at Comunicano. Such deals often take time to process — it took about a month for Sprint to say it would discuss the deal with Dish. Then, if it goes through, it is also subject to federal approval. If Dish wins the spectrum, though, it could certainly give Sprint a better idea of what Dish would have to offer.

“Any company that is serious about offering mobile services needs to have a strong spectrum portfolio, especially to compete with already established mobile operators,” he told the E-Commerce Times. “If the merger with Sprint happens, this would obviously bolster the combined company’s portfolio.”

Dish wouldn’t be the only winner in this deal. Espelien pointed out. This might be some of the best news LightSquared has heard in a while. The initiative has so far failed to live up to its promises of creating a speedy 4G LTE wholesale wireless network. Its efforts have in part been thwarted by the FCC, when some of LightSquared’s spectrum was found to interfere with GPS signals. The company filed for bankruptcy about a year ago.

“Given LightSquared is in bankruptcy,” he added, “”I would say a $2 billion bid for spectrum which is known to have interference problems with it would be a pretty amazing outcome.”