Dish-Sprint Marriage Could Breed Mobile Video

In announcing its intent to acquire Sprint, Dish Networks CEO Charlie Ergen made it clear the deal was driven by the unprecedented growth in mobile video usage.

But, the end result of the deal, if it comes to pass, could be a new form of mobile video hitting its network -- its own.

On a press call to announce Dish's $25.5 billion bid for Sprint, Ergen said consumers' expectation of watching mobile video anywhere and on any device was a driving force behind the unexpected move. Combining the U.S.'s third largest pay TV provider, which also happens to have a healthy swatch of 2GHz LTE spectrum, with the third-largest wireless operator would certainly help the pair get the capacity they need to accommodate the influx of video-driven data.

At the same time, it could also let them build their own service. In the short term, Ergen emphasized that Dish has the bundle in mind. It offers broadband and satellite TV, which make a nice addition to Sprint's mobile service, especially in rural areas where consumers don't have cable or IPTV alternatives. But, longer term, Informa analyst Mike Roberts says they are uniquely positioned to build a compelling mobile video service.

"Looking at the fundamentals, they would have a market leading spectrum position," Roberts says. "If there's anything you need to really build a robust mobile video business, that would be a key ingredient."

Beyond pure capacity and the bundle, the two could make a powerful duo given that Dish owns SlingMedia, which lets consumers watch their home TV on any Internet-connected PC, tablet, or smartphone, and Dish already has relationships in place with programmers.

"You could imagine a much more robust, coherent, branded offering where they go to town on mobile video based on key assets they have and try to differentiate," he says, adding that the service could also undercut its competitors on price. Dish has already been going the value-player route, while Sprint has emphasized the simplicity of its unlimited data plans.

Roberts thinks it may take awhile for Sprint and Dish to introduce a mobile video offering. If it even wins out over Softbank and gets approved, competing on the triple play bundle will be job number one. Then, the pair can turn to building a unique LTE mobile video service based on their spectrum holdings and other assets, he says.

"Initially they are playing catch up," Roberts adds. "They are trying to get up to parity, but they have the advantage of starting from scratch and potentially leapfrogging the competition."

-- Sarah Reedy, contributing editor, Light Reading