Dish Would Compete With Giants ‘From Day One,’ Ergen Says
Dish Would Compete With Giants ‘From Day One,’ Ergen Says
(Bloomberg) -- Charlie Ergen, the chairman of pay TV provider Dish Network Corp., said his company is ready to compete with the biggest U.S. wireless carriers “from day one” after it acquires assets that will clear the way for the merger of Sprint Corp. and T-Mobile US Inc.
Ergen began testifying Tuesday at an antitrust trial in New York where state attorneys general are trying to block T-Mobile’s purchase of Sprint, a deal they say will lead to higher prices for consumers by eliminating competition between the two companies.
Ergen is a key witness in T-Mobile and Sprint’s defense of the $26.5 billion deal. They say Dish’s plan to set up a brand new competitor should negate any concern that their tie-up will reduce competition. The states counter that Dish, which will start with 9 million customers, can’t replace Sprint, which has about 50 million.
“We will compete with the largest operators in the United States, and we’ll compete from day one,” Ergen told U.S. District Judge Victor Marrero, telling the court at one point that three banks are ready to lend $10 billion to Dish to build its new network.
Ergen, who started what is now Dish with his wife and $60,000 by selling satellite dishes from the back of his truck in the 1980s, said his vision is to use the assets he’s buying from the companies to offer customers lower prices and better services to build the business.
Even though Dish will start with a prepaid service, he said, the company intends to eventually offer a postpaid plan, sold to those with good credit. It would mark a move to compete directly for Verizon Communications Inc.’s and AT&T Inc.’s most lucrative customers.
The billionaire went over how his deal with T-Mobile will get him there. He’s buying Sprint’s prepaid brand Boost as well as wireless spectrum and initially will be able to use T-Mobile’s network while he builds his own, without limits on how many customers Dish ultimately has.
“Sprint doesn’t want to be in the business,” he said. “We do.”
Ergen said that the terms of the deal to ride on T-Mobile’s network, known as a mobile virtual network operator agreement, are “unprecedented” and that they prevent T-Mobile from raising prices on Dish for access.
Ergen is scheduled to continue testifying Wednesday, starting behind closed doors to discuss confidential business information, including talks with “strategic partners.”
To contact the reporters on this story: David McLaughlin in Washington at dmclaughlin9@bloomberg.net;Scott Moritz in New York at smoritz6@bloomberg.net
To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net, Peter Jeffrey
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