Dish Network Updates: Ready for T-Mobile Spectrum Deal When AT&T Pulls Bid

The last couple of weeks saw a temporary rise in Dish Network’s (NASDAQ:DISH) stock, perhaps influenced by Verizon’s (NYSE:VZ) $3.6 billion deal for acquiring AWS spectrum from Time Warner Cable (NYSE:TWC), Comcast (NASDAQ:CMCSA) and Bright House Networks. Verizon’s offer indicates that Dish Network’s spectrum could be worth $10 billion, according to one analyst. ^[1] If that’s the case, the value is clearly not reflected in Dish Network’s current price. The spectrum assets acquired from DBSD North America and Terrestar are valued at less than $3 billion on Dish Network’s balance sheet. Nevertheless the company has clarified that it does not plan to make money by selling its spectrum. ^[2]

See our full analysis for Dish Network

In fact, Dish Network has stated that if the AT&T (NYSE:T) and T-Mobile’s deal doesn’t go through, it is likely to partner with T-Mobile and thus put its spectrum to use. ^[1] T-Mobile is in need of spectrum, and Dish could charge it a royalty for utilization and thus effectively connecting itself with a high growth area of mobile broadband. Whatever Dish has done so far in terms of asset acquisitions, has made the company itself an attractive acquisition target.

In an unrelated development, Dish Network and Nexstar reached a re-transmission agreement for its local news telecasts and programming.

Our price estimate of $30.88 for Dish Network, implies a premium of almost 20% to the market price.

Understand How a Company’s Products Impact its Stock Price at Trefis

1. DISH Network (DISH) Higher Following $3.6B Verizon (VZ) Spectrum Deal, StreetInside.com, Dec 2 2011 [↩] [↩]
2. Dish Network Seeks to Partner With T-Mobile USA If AT&T Acquisition Fails, Bloomberg, Dec 13 2011 [↩]