Yesterday, DISH Network Corp. (NASDAQ:DISH) together with Sprint Corporation (NYSE:S) announced that the two companies have decided to jointly develop and deploy a fixed broadband network in Corpus Christi, Texas. The network is expected to start from mid-2014 on a trial basis. If successful, then the two entities may further extend the broadband network to other areas.
The service will run on Sprint Corporation (NYSE:S)’s 2.5 GHz spectrum for 4G Long Term Evolution Time Division Duplex (LTE TDD) network. DISH Network Corp. (NASDAQ:DISH) will provide either a ruggedized outdoor router or an indoor system to bring broadband to the site. DISH will also provide skilled manpower for installing equipment in customer premises. Sprint Corporation (NYSE:S) stated that the network will initially provide download speed of 50-60 Mbps, which can go up to 2 Gbps over time.
DISH Network Corp. (NASDAQ:DISH), the second largest satellite TV operator in the U.S., has constructed an extensive wireless/satellite spectrum base over the last couple of years. We believe DISH’s attempt to enter into the wireless market is a diversification strategy to counter pay-TV market saturation. DISH Network enjoys the opportunity to collaborate with several established telecom or tech companies to jointly set up a wireless network.
Earlier this year, DISH Network Corp. (NASDAQ:DISH) failed in its attempt to acquire Sprint Corporation (NYSE:S), the third largest telecom operator in the U.S. Current rumors in the industry suggest a possible merger between the two major satellite TV operators, namely, DISH and DIRECTV (NASDAQ:DTV).
On Jun 17, 2013, DISH Network Corp. (NASDAQ:DISH) and NTELOS Holdings Corp. (NASDAQ:NTLS) jointly started providing fixed-mobile broadband network to offer high-speed Internet service to areas served by NTELOS. These include Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky. NTELOS Holdings Corp. (NASDAQ:NTLS) provides wireless towers and other hardwires whereas DISH provides the valuable wireless spectrum licenses. Currently, DISH has a Zacks Rank #3 (Hold).
Disclaimer: This article is written by Zacks Equity Research and originally published at Zacks.com.