T-Mobile and Dish Launch Summer of Love

T-Mobile US and Dish are in merger talks, but there may be an ulterior motive for the news of the deal: to flush out other potential partners. And there are plenty who might like to elbow their way into this game. That said, they will have a tough time winning.

Wall Street likes the idea of Dish tying the knot with T-Mobile. While much would depend on the ultimate terms, a Dish-T-Mobile tie-up has a lot going for it. At the least, it would subtract some big disadvantages for both companies. T-Mobile would get a buyer and more wireless spectrum without major regulatory risk. That would allow its majority shareholder Deutsche Telecom to realize a long-sought exit from the company, while also leaving T-Mobile in a position to continue gaining share in the US wireless market. Dish would get a wireless network to use its spectrum. For these reasons, though, the tie-up would pose a threat to the other, big-three US wireless carriers: Verizon Communications, AT&T and Sprint. T-Mobile’s aggressive tactics on pricing and customer acquisition have already put average revenue per user under pressure at all its rivals and taken share from Sprint.