Even though the two companies are only discussing a possible deal and have not agreed upon anything, the logical mix of assets makes a lot of sense. Both have a customer base in complementary fields that would benefit the other, and DISH has a whole bunch of wireless spectrum. T-Mobile needs that spectrum to enhance its wireless network, while DISH must to put it to use or lose the rights to that lucrative asset.
But if we have learned anything from Twilight couple Robert Pattinson and Kristen Stewart, it's that sometimes relationships that look perfect from the outside do not end in marriage.
Everything looks good on paper for a DISH/T-Mobile merger. It's intriguing to think about what T-Mobile CEO John Legere would do as leader of the combined company. It's equally fun to think about how established players in both fields, including Comcast, AT&T, and Verizon, would respond to two disruptive forces growing stronger together.
It's a match that has consumers and investors salivating, but there are at least a couple good reasons why it might never be consummated.
T-Mobile does not need to sell
Deutsche Telekom AG, the parent company of T-Mobile, sees the value of either selling off the company at a premium or merging/partnering with the right company. It's clear that growing T-Mobile is an expensive proposition, and a sale or merger to lessen that load makes sense. That's why Deutsche Telekom AG pursued a deal with Sprint (NYSE:S) to merge the third- and fourth-place U.S. wireless companies, and it's why a DISH deal would be logical.
But, because T-Mobile has been growing its subscriber base and raising its stock value, its majority owner does not need to sell.
"T-Mobile has outperformed their expectations, that's for sure," said Sergey Dluzhevskiy, an analyst at Gabelli & Co., told Bloomberg. "They are going to be looking for the best possible deal. [DISH CEO] Charlie Ergen is a tough negotiator, and obviously Deutsche Telekom is not a forced seller."
Ergen and Legere are both mavericks, CEOs famous for their shoot-from-the-hip styles. Under the proposed terms of the merger, Ergen would serve as chairman and Legere would be CEO. That's a tantalizing relationship (particularly to those of us in the media) that sounds great on paper, but in reality two big personalities might not share a room so well.
One significant uncertainty is Mr. Ergen, who has held talks with companies across the wireless and satellite industries in recent years without completing a major deal. Dish bid openly -- and unsuccessfully -- for wireless carriers Sprint Corp. and Clearwire Corp. two years ago and has earned a reputation as a deal maker who is tough to get to closing.