Dish in talks to merge with T-Mobile: report

Jessica Guynn | USA TODAY

Show Caption Hide Caption A T-Mobile-Dish merger would reflect pressure to get big Reported talks between Dish and T-Mobile reflects pressure in the telecom industry to consolidate.

SAN FRANCISCO — Dish Network is in talks to merge with T-Mobile, according to a report in The Wall Street Journal.

The talks to combine the second-largest satellite TV provider with the fourth-largest wireless carrier are in the "formative" stages, one person familiar with the situation told the newspaper.

But the companies have agreed that Dish Chief Executive Charlie Ergen would be the company's chairman and T-Mobile Chief Executive John Legere would become the combined company's CEO, other sources said.

T-Mobile spokeswoman Janice Kapner declined to comment. Dish spokesman John Hall also declined to comment.

Under pressure from the Internet, the telecommunications industry is experiencing a wave of consolidation. AT&T is in a $49 billion deal to buy Dish competitor DirecTV.

As far back as two years ago, Ergen cited T-Mobile (TMUS) as a compatible merger partner. And last month during Dish's (DISH) earnings call, Ergen said that T-Mobile remains a possible partner and that "we are keeping all of our (options) open."

Jan Dawson, an independent technology analyst for Jackdaw Research, said the combination "makes perfect sense."

"Given the increasing consolidation in the market, T-Mobile and Dish were in danger of becoming the lone single-service providers left in the market, with everyone else combining TV, broadband, and wireless," Dawson said. "T-Mobile has a growing subscriber base and network but not enough spectrum, while Dish has lots of spectrum and no network, so their assets are very complementary. This merger would also go some way to overcoming some of T-Mobile's lack of scale compared to its larger competitors, AT&T and Verizon."

Recon Analytics telecom analyst Roger Entner is also bullish on the deal, though he wonders about the explosive personalities of Ergen and Legere. "I don't know if they'd blow each other up or the competition. Either they will get along just splendidly or they will very quickly hate each other."

T-Mobile last year was in talks to be acquired by Sprint. The deal ultimately collapsed out of fears that regulators would not approve the merger.

The expectation is that T-Mobile and Dish would not face similar regulatory opposition.

T-Mobile is the fourth-largest wireless carrier in the USA, though it's closing in on Sprint.

Under Legere, T-Mobile has emerged as a disruptive force in the industry, the self-proclaimed "Un-Carrier," scrapping onerous wireless contracts and agreeing to pay early termination fees for people who switch.