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Weighed down by a $26 billion debt pile, Dish Network says it will likely pass on the chance to buy more spectrum from T-Mobile
Back in 2020, the controversial $24 billion merger of US mobile giants T-Mobile and Sprint was finally completed, reducing the number of major national operators in the market from four to three.
As part of regulatory remedies applied to the deal, Dish was permitted to purchase all of T-Mobile’s 800 MHz licences for roughly $3.69 billion by June 30, 2023. This was intended to both help Dish establish itself as a national mobile network operator in the US, as well as reducing the massive potential spectrum advantage held by the newly combined T-Mobile.
However, by summer last year, it was clear that Dish was in no position to make the purchase at such a price. After lengthy negotiations, the subsequent dispute between Dish and T-Mobile was ultimately resolved with Dish agreeing to pay a deposit of $100 million in exchange for an extension of the purchase deadline to April 1, 2024.
But now, with that deadline just a month away, Dish says it will be highly unlikely that the company will be able to make the scheduled purchase.
“We no longer believe it is probable that we will exercise the option,” said Dish via parent company EchoStar late last week.
Dish has been struggling to raise additional financing for a number of months now, having invested billions in their new Open RAN-based 5G network, all the while being stung by surging interest rates. The company saw both its mobile and pay-TV subscribers decline last year, leaving investors with little confidence in the business.
The company was reacquired by its once-parent business, satellite company Echostar, earlier this year, in a move seen by many as an attempt to shore up the operator’s finances.
With the spectrum purchase by Dish seemingly out of the question, T-Mobile will now be forced to offload the spectrum via an auction process, provided it raises at least the promised $3.6 billion.
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