Smartphones, tablets and computers all pull data from the Internet, but people still pay two different bills: the high-speed connection they get at home, and the wireless connection they get outside. Dish Network, the pay-TV operator, wants to bridge that gap.
Dish Network said Monday it had submitted a $25.5 billion bid for Sprint Nextel, the nation’s third-largest wireless carrier after Verizon Wireless and AT&T.
The bid is an effort to scupper the planned takeover of Sprint Nextel by the Japanese telecommunications company SoftBank, which agreed in October to acquire a 70 percent stake in the U.S. cellphone operator in a complex deal worth about $20 billion.
Amid the fight for Sprint is a tug of war for Bellevue-based Clearwire, another wireless operator whose majority owner is Sprint.
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Sprint has signaled interest in taking over the company entirely with the cash infusion from SoftBank, but Dish in January made an unsolicited bid of $2.2 billion for a portion of Clearwire.
And on the heels of Monday’s news, Verizon offered $1.5 billion to buy spectrum from Clearwire, according to a person briefed on the company’s plans, who was not authorized to speak publicly because the plans were not yet official.
If Dish Networks succeeded in a takeover of Sprint, it would be in a position to acquire Clearwire more quickly than Sprint/SoftBank, because a foreign company that tries to buy more than 25 percent of a telecom company must undergo regulatory review.
Dish says a merger between it and Sprint Nextel could roll television, high-speed Internet and cellphone services into a single package that would be faster and more affordable for consumers.
“It really means that we’re going to give consumers what every consumer wants,” Dish Chairman Charlie Ergen said. “They want broadband and video and voice in their home and want the exact same thing outside the home. And they want it to look and feel and priced outside the same as it is inside.”
Under the terms of its bid, Dish Network said it was offering a cash-and-stock deal worth about 13 percent more than SoftBank’s bid.
Dish values its offer at $7 a share, including $4.76 in cash and the remainder in its shares. The offer is 12.5 percent above Sprint Nextel’s closing share price Friday.
“The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” Ergen said in a statement.
Ergen said a “Dish/Sprint merger will create the only company that can offer customers a convenient, fully integrated, nationwide bundle of in- and out-of-home video, broadband and voice services.”
Dish Network said it would be able to combine its existing broadband and TV offerings with Sprint Nextel’s cellphone operations, allowing it to better compete with rivals like Verizon that are moving into new areas in search of revenue.
Dish’s effort to take over Sprint is the latest of many moves toward consolidation in the competitive broadband industry. In 2011, AT&T tried to purchase T-Mobile USA, a move blocked by the Justice Department because of antitrust concerns.
Last year, Verizon scored a deal with a group of cable companies that agreed to sell it spectrum licenses for its wireless network in exchange for allowing them to sell their cable services inside Verizon stores.
The big question surrounding the industry is whether partnerships and mergers are good not just for businesses but also for the customers. Opponents of mergers say they lead to fewer jobs, less competition and higher prices.
But analysts Monday said a potential Dish-Sprint merger may pose a greater challenge to AT&T and Verizon, which dominate the wireless industry and charge higher prices for their phone plans.
As the No. 3 cellphone-service provider, with 56 million subscribers nationwide, Sprint Nextel has struggled to catch up with larger rivals. It is expected to face even more competition as the parent of Bellevue-based T-Mobile moves closer to a multibillion-dollar agreement to buy MetroPCS.
Dish Network said it would finance the cash component of the takeover through a combination of $17.3 billion in cash and debt financing.
Sprint said it would look at the proposal but declined to comment further.
Ergen said his company was a better fit than SoftBank for a merger with Sprint because it would bring greater benefits to consumers.
Fourteen million Dish Network subscribers will get improved services on their cellphones, and shareholders would own 32 percent of the combined company, whereas Softbank’s merger is essentially a cash infusion to strengthen Sprint.
“Sprint doesn’t change overnight because of SoftBank — it’s still Sprint,” he said. “Sprint transforms overnight with Dish.”
Susan Crawford, a law professor at Cardozo Law School who served as special assistant to President Obama for science, technology and innovation policy, said there were pros and cons to a Sprint merger with Dish.
The combination would pose more of a threat to AT&T and Verizon, which account for two-thirds of U.S. wireless subscribers, than a partnership with SoftBank, she said.
But it would also weaken T-Mobile, the No. 4 carrier that has been offering cheaper phone plans to consumers, like its latest contract-free phone plans.
“Right now, we have two giants and two also-rans, and now you’re getting potentially three giants dividing up the American market place, with T-Mobile lagging far behind,” she said of the potential Dish-Sprint merger.
It is unclear whether a Dish takeover would change much about Sprint’s wireless service.
Chetan Sharma, an independent telecom analyst who is a consultant for carriers, said the only obvious change for consumers would be from a marketing level, not a technology level.
While the bills may be consolidated, it would not be easy to share the benefits of a high-speed Internet connection at home with wireless networks that connect to a phone outside, he said.
Sharma said a Sprint merger with SoftBank would likely be better for consumers because the two carriers combined would have more buying power to negotiate with manufacturers like Apple or Samsung to buy phones at lower prices.
Because the phones would be cheaper for Sprint, the carrier could charge customers less to access its network to make up for the costs of the phones, he said.