DISH’s Offer for Clearwire Doomed to Failure?

DISH Network Corporation, the North American direct satellite broadcaster, has put a recent spanner (“wrench” in American English) in the works for Sprint's acquisition of the remaining 49.6% of Clearwire, the U.S. wholesale 4G LTE and retail WiMAX service provider. Will it succeed?

Very unlikely. Sprint's market share and stock market performances have been stuck in the doldrums compared to Verizon's and AT&T's. Clearwire's spectrum assets are very much seen as integral to Sprint's long-term LTE plans. Having a larger spectrum bank than the other national players in urban areas could help Sprint to differentiate its wireless broadband offerings by being more price competitive (if need be) than its major competitors.

DISH sees Clearwire's spectrum and wireless network engineering expertise as invaluable in helping it build out its 4G voice and multimedia broadcast services. The satellite and cable market is largely saturated, with the growth in tablets and smartphones being a "Third Screen" opportunity.

Sprint, however, will not be willing to give such a substantial "leg up" to a potential competitor. Plus, it would tarnish the value of Sprint to SoftBank, which hopes to secure Sprint and Clearwire to create a global telecom player.

Blog based on an ABI Insight…