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(Updated 5:37 p.m.)
Did AT&T and Verizon see this coming?
Dish Network, the satellite TV provider, wants to go into the cellphone business by acquiring Sprint Nextel Corp. in a $25.5 billion cash and stock deal.
Dish has been struggling to grow its subscriber base for satellite TV service, which had 14.1 million customers at the end of last year, compared with DirectTV’s 20 million subscribers.
Sprint is trying to move out of its No. 3 spot among cellphone service providers, especially with the threat of a combination of T-Mobile USA and MetroPCS.
Of the nearly 3.8 million metro Atlantans age 18 and older with wireless plans, Sprint ranks No. 5 among providers with a 10 percent local market share, according to data provided by Scarborough Research. Nextel has less than 1 percent of the market. The metro wireless leaders are No. 1 AT&T (34 percent); No. 2 Verizon Wireless (22 percent); No. 3 MetroPCS (nearly 12 percent); and No. 4 T-Mobile (11 percent).
Dish Network also ranks No. 5 in metro Atlanta among bundled service providers with nearly 4 percent of the market. The bundled service leaders are No. 1 Comcast (48 percent); No. 2 AT&T (40 percent); No. 3 Charter (nearly 9 percent); and No. 4. DirecTV (6 percent).
During a conference call covered by The Associated Press, Dish Chairman Charles Ergen said teaming up with Sprint would allow both companies to provide twice as much bandwidth as AT&T and Verizon for cellphones, tablets and other devices.
Ergen told the New York Times the combined company “will create the only company that can offer customers a convenient, fully integrated, nationwide bundle of in- and out-of-home video, broadband and voice services.”
The deal offers more for Sprint than the $20 billion SoftBank Corp. is willing to pay for a 70 percent stake in the company. Softbank, a Japanese telecommunications company, also wants to position Sprint as a stronger competitor to AT&T and Verizon.
Dish says it’s even willing to pay a $600 million breakup fee for Sprint and SoftBank to call off their deal.
What do you think about the combination of Dish and Sprint?