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November 17, 2012

Google Aims to become a wireless carrier

Google is indeed making plans to start its own wireless network, one that would compete directly with Verizon, AT&T, and T-Mobile. It is said the search giant has been in talks with satellite TV provider, Dish Network in recent weeks and both companies are looking to bring forth a new wireless network.
Wall Street Journal - The talks between Dish and Google aren't advanced and could amount to nothing, one of the people said. Google is just one of several companies that Dish has held talks with recently, and the discussions with other potential partners are also at an exploratory stage, said the people familiar with the discussions.



EWeek - Dish is looking for a long-term partnership like the one Sprint had formed with LightSquared, in which the two would share the network and its costs. A wireless Dish network would also rely on some spectrum designated for satellite use, and the company, which has said it will "use the spectrum for a solely ground-based cellphone network," according to The Journal, is currently awaiting a thumbs-up from the FCC.

Dish's spectrum makes it particularly attractive to the wireless carriers at a time of shifting pieces and hurried Long Term Evolution (LTE) rollouts. This autumn, T-Mobile and MetroPCS announced plans to merge, and Sprint sold a 70 percent share of its business to Japanese carrier Softbank for $20.1 billion—a sum that will do wonders to help the deeply in-debt carrier and its LTE rollout efforts. Within weeks of the Softbank agreement, Sprint announced plans to buy a majority share of Clearwire, its partner in 4G, and later spectrum and customers in the Midwest from U.S. Cellular.

All these deals mean increased competition for Verizon Wireless and AT&T, which are both at the top of the wireless network food chain.

Technology Business Research analyst Eric Costa, in a research note following AT&T's October earnings report, saw Dish as a potential answer to some of the threat of competition.

"TBR's belief is that AT&T will make a move of its own in 2013," wrote Costa, "such as an acquisition of Leap Wireless or a deal with Dish Networks that will help create more separation between [AT&T] and Sprint."

For the time being, however, much depends on Dish receiving FCC approval.

"For Dish, having potential network partners lined up as the FCC deliberates shows its commitment to building a wireless network, rather than flipping the spectrum—worth several billion dollars—to a buyer upon gaining approval," wrote The Journal, again citing people familiar with Dish's discussions with Google.


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