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10 January 2013
| Kavit Majithia
By the end of 2012, it appeared the scene had been set for the US wireless market going into the New Year. As Richard Karpinski, senior analyst at Yankee Group, describes it: "We seemed to have settled in to a nice sort of equilibrium."
Verizon looked set to nurture
its lead in LTE by increasing its roll-out, with closest rival
AT&T aggressively competing to consolidate its position by
closing a slew of spectrum deals. Softbank-backed Sprint looked
set to take Clearwire, and in turn, its spectrum, while
T-Mobile was to increase presence and power through MetroPCS. A
profitable year all round, on all accounts.
Colorado-based satellite provider Dish Network has other ideas.
unsolicited bid for Clearwire announced on Tuesday took
that ephemeral state of order in the US market and blew it
right out of the water.
The bid, higher than Sprint's, was certainly surprising and may
have come as an unprecedented shock to the US's third largest
player. Sprint's easy path to taking full ownership of
spectrum-rich Clearwire was simply thought of as a prerequisite
to it competing with AT&T and Verizon.
Karpinski notes, rightfully, that even if Dish, as expected,
proves unsuccessful with its bid, the real story lies in the
company showing its hand for the future.
For many market watchers, Dish spectrum was well and truly up
for grabs in 2013. Now, it appears the company is looking to
increase its presence, and indeed looking for a partner.
Sprint has the option of leaving Clearwire open as a spectrum
wholesaler/hoster, but it cannot afford to be without its
spectrum in its bid for market share. Dish's sweeter offer
could force Sprint's hand to up its offering for Clearwire, and
concede to the clamour of the Clearwire shareholders that the
company is worth more, despite Softbank's insistence that it
will not do so.
The question now remains: What will Dish do next? Yankee Group
predicts Sprint will fend off Dish in the end, with AT&T
the most likely company to acquire Dish spectrum if it goes up
for sale as a result of the failed bid. T-Mobile, on the other
hand, is the most likely network sharing partner, considering
its position. Karpinski even throws Google into the hat as a
likely wildcard partner.
Already, the US market is not shaping up as everyone thought it
would. Dish's bid for Clearwire is just the first step towards
a long and convoluted end game.