Dish Seen Falling to DirecTV as Growth Stalls
Dish Network Corp.’s stagnating growth is increasing the pressure on Chairman Charlie Ergen to combine with rival DirecTV, 10 years after a failed attempt.
Ergen said this week that the two largest U.S. satellite-TV providers “have to consider” a deal, potentially joining a rush of consolidation in the telecommunications, cable and satellite-TV industries that has already topped $46 billion in the U.S. this year, according to data compiled by Bloomberg.
Dish is facing declining profit this year, and analysts estimate sales will rise only 7.8 percent through 2014, less than 95 percent of the other cable and satellite-TV providers globally.
The Federal Communications Commission has said it will decide whether Dish can use its wireless spectrum to transmit mobile voice and data by year-end, and Sanford C. Bernstein & Co. says that may be the catalyst for a takeover of the $16 billion company. With use of the new airwaves, a combined DirecTV-Dish could offer fast wireless Internet connections that regulators are encouraging along with pay-TV, which may help persuade officials to approve a deal they blocked as anticompetitive in 2002, said HighMark Capital Management Inc.