Sprint abruptly pulled out of the H block wireless spectrum auction after pushing for it previously. That apparently leaves Charlie Ergen’s DISH as the only likely bidder at a guaranteed-to-the FCC minimum reserve price of $1.56. Lets leave aside the absurdity of a spectrum auction with only one realistic bidder(and the questions of market concentration/collusion it raises). Instead, lets focus on what come next.
Maybe Sprint decided to not buy the H block spectrum from the government because they plan to buy it in later? Along with the rest of DISH’s ginormous spectrum holdings?
DISH has a lot of spectrum, a lot of cashflow from its satellite TV business, and nowhere to go with either. DISH fought hard to break up (or into) the Sprint/Softbank merger last year. Failing at that, DISH is left with 2 choices.
- Launch a 5th US wireless carrier (a tough bet, although Charlie is pretty out there on the risk/insanity curve).
- Merge with an existing carrier. Practically either Sprint of T-Mobile.
Option 2 seems more likely. So Sprint’s gracious step-aside on the H block auction may be to avoid bidding against its (future) self. But where does that leave T-Mobile?
Sprint has a lot of spectrum. T-Mobile has very little. So they are arguably more desperate. So maybe this is just Charlie getting his eventual buyer (T-Mobile) nervous by cozying up to Sprint. Which would be par for the course given Charlie Ergen’s convoluted (and effective) negotiating style.
The only caveat for all concerned is that no-one has ever actually been able to OPERATE a company in partnership with Charlie Ergen. I have some fairly direct experience of this from the 90’s and there’s no sign he’s mellowed. The best hope for all concerned is that this sale marks his (genuine) retirement. Otherwise the aftermath will be a major management crack-up.
The other solid conclusion is that the US wireless market is about to get a whole lot more competitive. Which might be another reason AT&T is shopping for companies in Europe and Vodafone just sold out of the US (to Verizon).
