Options for Rivals in Wake of AT&T’s Bid for DirecTV

[Commentary] Few industries have been as deeply embroiled in merger mania as the telecommunications industry, particularly after AT&T’s $48.5 billion bid for DirecTV. Now, with another mega-deal in the works, how will others respond?

Perhaps with even more consolidation. AT&T‘s acquisition most clearly affects the country’s other major satellite television provider, Dish. Dish Chairman Charles Ergen has made no secret that deals were an important part of his strategy, whether they be a foiled attempt at buying Sprint or a withdrawn bid to acquire the bankrupt broadband wireless provider LightSquared. And in recent months, news reports contended that Ergen was interested in pursuing deals either for T-Mobile USA or DirecTV.

At the same time, analysts had long speculated that Dish might make an attractive acquisition target for AT&T. A bigger and more emboldened AT&T may also have repercussions for Sprint, whose majority owner, the Japanese telecom Softbank, has long coveted a deal with T-Mobile to gain much-needed scale.

Yet a tie-up of the two has already drawn hints of vocal opposition from several officials at the Federal Communications Commission, who have worried that a merger of the two would constitute an unacceptable level of consolidation.

Sprint and SoftBank have argued not so subtly that acquiring T-Mobile would create more competition in the wireless industry, blunting the power of Verizon and AT&T.