Dish Network Corp. has bowed out of the battle for mobile service provider Clearwire Corp., marking the second major blow in less than a week to Dish chairman and founder Charlie Ergen and his plan to expand into wireless. The decision, announced on Wednesday, officially put an end to a bidding war between Dish and Clearwire’s majority owner Sprint Nextel Corp., and raised questions about what options Ergen has left in as he tries to expand beyond satellite TV services into the U.S. wireless market.
Charlie Ergen’s $25.5 billion offer to buy Sprint may be about much less than gaining control of the No. 3 US wireless carrier. Ergen’s Dish Network yesterday made a nonbinding offer of roughly $7 a share for Sprint — which is more than twice its size — but its target may actually be the Sprint-controlled 4G network Clearwire, sources say.
Under the proposed deal, Dish Network Corp. would buy about 24% of wireless network operator Clearwire’s spectrum assets for $2.2 billion, and Clearwire would build and manage a wireless network for Dish. Dish would also provide up to $800 million in additional financing to the struggling Clearwire.
AT&T Inc. may look to Dish Network Corp or Clearwire Corp for its next deal as it recovers from its failure to buy T-Mobile USA. Dish and Clearwire are seen as the most likely places AT&T will look for new spectrum because Dish is poised to buy a massive chunk of airwaves and Clearwire needs funding and it has large amounts of spectrum it is not using today.