AT&T View Change Shows It Wants Dish Spectrum, Analysts Say

AT&T Inc. (T)’s change of view on Dish Network Corp. (DISH)’s request for a spectrum waiver from U.S. authorities signals the phone company is eager to buy airwaves from the satellite-TV provider, Credit Suisse Group AG said.

There should be no “restrictions on the transfer and/or leasing” of the spectrum, AT&T wrote in comments to the Federal Communications Commission on Jan. 26. The letter is a “change of heart” for AT&T, Stefan Anninger, a Credit Suisse analyst, said in a note yesterday. AT&T also urged the agency to require a fast-track network buildout, a stipulation that could make it difficult for Dish to keep the spectrum, Anninger said.

AT&T trails main rival Verizon Wireless in the amount of spectrum suitable for higher-speed services such as video streaming and Web browsing. Last month, AT&T abandoned its $39 billion acquisition of T-Mobile USA in the face of regulator opposition, withdrawing from a deal that would have given it more airwaves. Dish obtained spectrum last year and is waiting for regulatory approval to use it for wireless services.

“AT&T wants the spectrum,” Jonathan Chaplin, a Credit Suisse analyst, said in an e-mail. “Previously AT&T was pushing for a more extensive review of the waiver request. Now they seem to be supportive of an expedited review.”

AT&T had submitted comments on the Dish spectrum in November, before its T-Mobile deal collapsed.

Mark Siegel, a spokesman for Dallas-based AT&T, declined to comment. Aaron Johnson, a representative of Englewood, Colorado- based Dish, wasn’t immediately available for comment.

Takeover Target?

Dish rose 2.8 percent to $28.41 at the close in New York. AT&T added 0.6 percent to $29.34.

The Dish spectrum, acquired from the bankruptcies of DBSD North America Inc. and TerreStar Networks Inc., is worth about $8.6 billion, according to Anninger. His estimate is based on the $3.9 billion price of Verizon Wireless’s pending purchase of unused airwaves from Comcast Corp. (CMCSA), Time Warner Cable Inc. (TWC) and Cox Communications Inc.

Analysts including Stifel Nicolaus & Co.’s Christopher King have said that Dish may be an acquisition target for AT&T, which is under pressure to add capacity to accommodate network traffic growth and keep up with Verizon Wireless.

While AT&T probably doesn’t want Dish’s satellite-TV service, Dish Chairman Charlie Ergen may decide that he will only sell the spectrum and the TV business together, Chaplin said. If that’s the case, AT&T may divest the satellite-TV business after acquiring the entire company, Chaplin said.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net; Todd Shields in Washington at tshields3@bloomberg.net

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net; Michael Shepard at mshepard7@bloomberg.net

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