Who Wants Clearwire’s Spectrum Now?

The battle for spectrum is intensifying. As Dish Network’s (NASDAQ:DISH) Chief Executive Officer Joe Clayton described the commodity at the Consumer Electronics Show in Las Vegas last week, spectrum has become an asset so valuable to wireless companies that it is now seen as an equivalent to gold, oil, and water.

Prompted by Dish Network’s recent $2.28 billion offer for Clearwire (NASDAQ:CLWR), AT&T (NYSE:T) and DirecTV (NASDAQ:DTV) may soon join the acquisition fray. TMF Associates satellite communications and wireless spectrum consultant Tim Farrar told The Wall Street Journal that the Clearwire proposal could cause AT&T and DirecTV to make an offer for Dish.

Here is a recap of parties involved in the spectrum grab…

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While there are no substantive merger discussions in progress, DirecTV Chief Executive Mike White said at Citigroup conference last week that there would be “strategic merit” and “synergies” in a merger with Dish Network, according to the Journal. Dish, which is the third-largest pay-TV operator after Comcast (NASDAQ:CMCSA) and DirecTV, would pose a much larger threat to DirecTV if it can harness Clearwire’s spectrum to its efforts to build a wireless network.

With one offer on the table from Sprint (NYSE:S) and one from Dish Network, AT&T will lose out if either bid is accepted by Clearwire’s board of directors and approved the Federal Communications Commission. If Sprint is able increase its stake in the wireless broadband company from its current 50 percent stake, it will have more spectrum than AT&T and Verizon (NYSE:VZ) combined. However, if Dish Network’s higher bid wins out, the company could begin building its own network, one that the company has said would rival that of the industry’s leaders. AT&T could acquire spectrum by purchasing Dish Network, but that will be difficult if Dish takes over Clearwire because regulators may be wary of allowing a deal with such a large amount of wireless spectrum involved.

Sprint made an offer of $2.2 billion, or $2.97 per share, for Clearwire in the middle of December that was accepted by the company’s board. Currently, Sprint lags far behind the market leaders AT&T and Verizon, but with the acquisition, Sprint would have access to the broad stretch of airwaves that Clearwire owns. As Bloomberg reported at the time, this spectrum would give Sprint “the ability to improve its own network and handle a surge of traffic generated by smartphones and tablets.”

Close to a month after Sprint made its bid, Dish Network offered one as well. While some analysts saw the proposal as proof that Dish’s Chairman Charlie Ergen is serious about his wireless provider aspirations, others have argued that the $3.30 per share buyout offer was an attempt to forge a 4G partnership with Sprint.

But Dish’s proposal would “require Sprint to voluntarily waive rights that it holds as a stockholder of Clearwire,” and it has no intention to waive those rights, the company said in a statement. However, Clearwire is obligated to consider Dish’s offer.

Investing Insights: Sprint Can’t Escape Drama.