T-Mobile US said to be mulling merger with Dish Network

The US multiplay convergence race looks set to continue with the WSJ reporting that scrappy mobile operator T-Mobile US is in talks to merge with cable TV player Dish Network.

The potential deal comes in the shadow of Comcasts failure to gain regulatory approval for its acquisition of Time Warner Cable and Charter’s subsequent move for TWC, while AT&T is in the process of acquiring DirecTV. Just as in many other mature telecoms markets the trend in the US is for multiplay communications offerings in which fixed, mobile and premium content are all served up in one bundle.

The WSJ reckons both parties are close to finalising part of the deal in which outspoken TMUS CEO John Legere would be CEO of the merged company and current Dish boss Charlie Ergen would be Chairman. However, with the companies both of a similar size (TMUS market cap = $31bn; DISH market cap = $33bn) it seems the pricing details are still some way from resolution.

It is thought there is some sound logic to the deal. Not only are the core offering complementary, but Dish also has a bunch of wireless licenses currently gathering dust. TMUS owner Deutsche Telekom has been exploring strategic options for its US subsidiary for some time, including a merger with Sprint and even previous talk of a Dish deal, but none have come to fruition.

But these kinds of telco consolidation deals have come to seem inevitable, as each new announcement increased the pressure on companies with a single comms offering to follow suit. The stock markets seem to approve, with DISH opening up 7% and TMUS opening up 6% on the report.