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Dish chairman says Sprint modernization has to be done from the US

Dish Network chairman Charlie Ergen was responding to remarks by SoftBank chairman Masayoshi Son

Dish Network chairman Charlie Ergen said Wednesday that his is an American company, and the modernization of Sprint Nextel's network will have to be done from the U.S. with operations control in the country, and English speaking staff.

The remarks in an interview to USA Today come after SoftBank Chairman and CEO Masayoshi Son, which has a rival bid for Sprint, took a swing at Dish.

"We're offering a higher price. That's just math," Ergen said in the interview. It's insulting to managers of Sprint to say that the only team that knows how to build a network is in Japan, he added.

Dish, a satellite TV service provider, made a US$25.5 billion bid to acquire Sprint last month. SoftBank in Tokyo announced in October last year that it had reached an agreement to acquire a 70 percent stake in Sprint for $20 billion.

Dish has previously also focused on its advantages as a U.S. company for clinching the Sprint deal. In filings to the Federal Communications Commission, it has argued that its merger proposal was better for U.S. national security than the proposal from SoftBank. It also said that the proposed merger would put more U.S. spectrum than anyone else holds in the hands of a single, foreign-owned company.

Son on Tuesday criticized the offer made by Dish in Englewood, Colorado, claiming it is based on "imaginary" numbers and would create a company with "insane" levels of debt. SoftBank did not plan to increase its bid for Sprint, as it was already offering a better deal than Dish, he said in Tokyo. Dish's proposal includes a large payment in stock, and some of the payment would be delayed for a year, while SoftBank would pay immediately in cash, he added.

Countering claims that Dish was an amateur in the mobile business, Ergen said that Dish grew without previous experience in the satellite business, much the way SoftBank evolved from technology investor to wireless carrier.

Son claimed that as SoftBank and Sprint are both mobile operators, their merger would create one of the largest operators in the world with clout in procurement and other deals. Both companies are rolling out high-speed LTE networks for smartphones, while Dish is in a different business as a satellite provider, he added.

SoftBank received support for its bid earlier this week from chip maker Intel, which described Son's plan to build a high-speed competitive third national network as "very compelling." In a letter to FCC Chairman Julius Genachowski, Intel CEO Paul Otellini said he preferred that SoftBank rather than Dish acquired Sprint, as competition in the wireless space is needed as the model provided by AT&T and Verizon Wireless is not giving that to consumers at this time.

Sprint has also received clearance from SoftBank to enter into a non-disclosure agreement with Dish to get further information from it regarding its offer. Sprint is, however, barred from disclosing any non-public information to Dish or to negotiate terms for a future deal.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is [email protected]


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