Dish and Google May Have a Wireless Affair!
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In the past, food, shelter and clothing were considered to be the basic necessities for the survival of a human being. There were days when people were happy and content with these three things in life. But times have changed. Now we have more to add to the list of the so-called "basic necessities."
Nowadays, internet and mobile phone are the two things without which survival has become difficult. But to bring the internet and mobile services to consumers requires a huge infrastructure. The giants of the industry are aware of this and are in a rat race to capture market share.
The days of a wired network are slowly fading. Wireless is the new buzz word. AT&T (NYSE: T) and Verizon (NYSE: VZ) are two corporate behemoths providing wireless services for internet and mobile services.
Dish Network (NASDAQ: DISH) is an American satellite broadcaster, providing direct-broadcast satellite service—including satellite television, audio programming, and interactive television services—to commercial and residential customers in the United States. DISH has been looking for a partner in building out a wireless network with the wireless spectrum—the airwaves that can be used to provide mobile phone and internet services—it has acquired since 2008. According to the chairman of DISH, Charlie Ergen, the company is looking to partner with a corporation that already has wireless towers and related infrastructure for transmitting data, among other expertise in the business. It has been in talks with many companies for potential partnerships to provide wireless services.
Google (NASDAQ: GOOG) is one of the several companies that DISH has held talks with recently. Google is the czar of online business, and now the company has started making its own smartphones and tablets through Motorola. The most–used mobile operating system for smartphones, Android, is also owned by Google. Google is now expanding its ownership of the infrastructure that brings the Web to personal computers and mobile devices, including the wires that connect people's homes to the Internet. Google believes that faster Internet download speeds at home and on mobile devices mean people can use more Google services such as Internet search, Gmail and YouTube video, translating into more revenue for the company.
"From Google's perspective, it wants people to watch 10 hours of YouTube a day on their devices, and what hurts them is (wireless carriers) restricting capacity," said Walter Piecyk, a wireless-industry analyst at research firm BTIG.
This is the reason Google wants to invest in wireless infrastructure. Though Google doesn’t have much expertise in wireless infrastructure and doesn’t control spectrum, the company has cash – more than $45 billion at the end of September – which could be used to help build a new network.
If Google manages to gain some control over wireless spectrum, it could push to increase Web traffic speeds on mobile devices. Google also could ensure the availability of new services such as Google Wallet, a mobile payments system that currently is blocked by AT&T and Verizon.
Back in June, the chairman of Dish had named T-Mobile USA and Sprint Nextel as possible partners, but both companies have recently unveiled their plans to merge with other companies.
AT&T is an American multinational telecommunications corporation and is the largest provider of mobile telephony and fixed telephony. It also provides broadband subscription television services. In order to strengthen its wireless services and meet the demands of its customers, AT&T had proposed buying T-Mobile for $39 billion last year. But the regulators blocked this deal. Some of the analysts believe that AT&T could be another logical partner for Dish to provide wireless services.
Verizon is an American global broadband and telecommunications company. It is also the biggest rival of AT&T. Verizon purchased spectrums worth $3.9 billion from Bright House Networks, Comcast, Cox Communications and Time Warner Cable that the Federal Communications Commission approved. This is another reason why AT&T has been aggressively seeking out ways to bolster its own spectrum resources. When Dish secures the regulatory approvals, it would have AT&T’s infrastructure in place to host its spectrum and AT&T would have the benefit of added spectrum.
Who would partner with DISH is still a mystery. But from an investor's point of view we can say that the partnership will definitely give a boost to the share prices of the companies tying knot with each other. The rumors of possible partnership would also lead to temporary rise in the share prices of the companies. This could be the time for traders to make some quick bucks. If an investor is ready to take calculated risks, it is possible to make some good money in the coming days.
shinerulz has no positions in the stocks mentioned above. The Motley Fool owns shares of Google. Motley Fool newsletter services recommend Google and AT&T.; Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.