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Dish may serve up mobile television service

24 марта 2008

Dish Network, the US direct broadcast satellite TV operator, could be considering launching a mobile television service to compete with the leading US mobile phone companies, according to industry analysts.

Dish may serve up mobile television serviceThe company, which has about 12.7m satellite TV customers, was a surprise bidder and big winner in the Federal Communications Commission’s auction of prime 700Mhz spectrum which ended last week with bids totalling $19.6bn.

While Verizon Wireless, the joint venture between Verizon Communications and Vodafone Group of the
UK, and AT&T, the largest US telecoms group, spent most in the auction, Dish, through a company called Frontier Wireless, won nearly enough licences to create a nationwide footprint.

Dish spent $712m for licences in the so-called “E” block of spectrum which is ideal for video but does not allow for two-way services.

“We suspect Dish bid on E block spectrum to build a wireless video network, rather than a data or voice network [which requires two-way communications],” noted Jason Bazinet of Citigroup Global markets in a note to investors. “We were surprised Dish entered the auction and more surprised it emerged as a big winner.”

With the cable and satellite industry in the US maturing – roughly 80 per cent of US households have multi-channel TV services – analysts have suggested video customer adoption rates could slow, encouraging operators such as Dish to invest in wireless broadband services.

However, Mr Bazinet estimates that it could cost $3bn-$5bn to establish a nationwide mobile video service.

Dish’s auction success probably also reduces the chance that the company could be acquired by AT&T.

“This level of investment seems to signal that Dish plans to compete with the cable and telecoms companies on a standalone basis rather than sell to a rival,” Citigroup said.

Dish declined to comment on the auction results, or its plans.

Meanwhile, other analysts warned that the decision by Verizon Wireless to spend $9.36bn in the auctions may prove to have been a risky investment.

“Verizon spent $4.7bn on the national C block with open access restrictions, $2.6bn on A block that may have interference issues and $2.1bn on particularly expensive B block licences,” noted Jason Armstrong of Goldman Sachs.

Under the terms of the auction, Verizon must adopt “open access” provisions for the C block spectrum and allow any device, once tested, to run on the network.

By contrast, Mr Armstrong said that the other big auction winner, AT&T, spent roughly $9.1bn in the auction for spectrum that has “fewer requirements and lower potential for interference”.

AT&T’s mobile unit is expected to use the spectrum it acquired in the auction to roll out a next generation 4G network based on LTE (long- term evolution) technology beginning in 2010.

Источник: Financial Times

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