A DISH Network (DISH-$39.26) – Sprint Nextel (S-$7.09) deal offers
multiple venues for revenue growth. DISH could offer subscribers triple-play
services (high-speed internet, phone, and video) by merging its own satellite
network with Sprint’s wireless network. In terms of cross-selling – excluding overlap
– there is the equivalent of 17 million Sprint households that could be
targeted for DISH Pay-TV services and approximately 14 million current DISH
households that could potentially add about 35 million new mobile users to
Sprint’s subscriber base.
Management opines that potential
revenue and cost synergies could reach $37 billion, of which $11 billion would
come from the spend side (alignment of sales & distribution channels and
reduction of similar operations, such as call centers or billing and collections
services).
Fitch Credit believes, however, that
the deal is fraught with substantial execution and integration risks.
Editor David J
Phillips does not hold a financial interest in any stocks mentioned in this
article. The 10Q Detective has a Full Disclosure Policy.
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