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Dish Network offering to buy Sprint in $25.5B deal


By Peter Svensson

AP Technology Writer

NEW YORK (AP) — Dish Network Corp. is trying to snag U.S. wireless carrier Sprint Nextel Corp. away from its Japanese suitor in recognition of the way satellite dishes are losing their relevance in the age of cellphones that play YouTube videos.

Dish offered $25.5 billion in cash and stock on Monday for Sprint, which Dish says beats the offer from Japan’s Softbank Corp. Softbank is offering $20 billion in cash, and shareholders get to keep 30 percent of Sprint. Dish is offering $17.3 billion in cash, and Sprint shareholders get 32 percent of the combined Dish-Sprint.

Sprint Nextel Corp.’s stock jumped on the news, as investors started looking forward to a bidding war between Dish and Softbank. Sprint had accepted the Softbank offer and was expecting to close on it this summer. Sprint, the country’s third-largest cellphone carrier, said it would evaluate Dish’s offer.

Charlie Ergen, Dish’s executive chairman, has been looking for a way into the wireless world for years. Dish has been buying space on the airwaves for cellphone service or wireless broadband. The Englewood, Colo., company has tried to partner with cellphone companies to put its spectrum rights to use, but has been repeatedly rebuffed.

The wireless world is in a ferment of deal-making. The largest two carriers, Verizon Wireless and AT&T Inc., are trying to bolster their spectrum holdings, while the next largest, Sprint and T-Mobile USA, are trying to make alliances to better compete after years of seeing their subscribers move to the bigger players. T-Mobile USA has struck a deal to merge with No. 5 MetroPCS Communications Inc., and Sprint’s deal with Softbank would give Sprint a much-needed cash infusion.

On a conference call Monday, Ergen said that Dish is a better fit for Sprint because it can combine its spectrum rights with Sprint’s. Dish can also use its army of satellite dish technicians to install antennas for wireless broadband on customer’s roofs, creating a competitor to cable and phone-line broadband.

Dish has 14.1 million TV subscribers, making it the No. 2 satellite-TV company after DirecTV. Comcast Corp. is larger than both and is the nation’s largest subscription-TV provider. Sprint, which is based in Overland Park, Kan., has 55.6 million wireless devices on its network.


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