The telecom world has always been an incestuous one, filled with partner swapping and friends quickly becoming enemies. The best proof of this comes from a report this week from The Wall Street Journal that suggests that T-Mobile and Dish Network have begun talks about a possible merger. The talks are said to be very early and might not ever be finalized. The combined company would be led by CEO John Legere (T-Mobile CEO) and board chairman Charlie Ergen (Dish CEO).
While it may seem like this combined company is an odd idea, it is by far not the weirdest part of the story. To get a feel for just how odd all of this really is, let's go back to 2010. This was a time before John Legere, and long before anyone knew the name Softbank. The quickly failing T-Mobile was looking for a way to stay in business, and it started with a simple talk with Clearwire. The company was powering Sprint's WiMax network and T-Mobile wanted in. Ultimately this partnership was not to be, with Sprint owning over half of Clearwire it just didn't make sense.
T-Mobile's next step was to try for a merger, their first try, with AT&T Mobility for $39 billion. This announcement took place almost exactly 1 year after rumor broke of the Clearwire talks. The timeline suggests that T-Mobile's management must have left Clearwire's offices and drove directly to AT&T. Famously, however, this merger did not work out, costing AT&T $2 billion care of the federal government. At the same time that all fell apart, it was revealed that Sprint had been in talks with MetroPCS - that also didn't work.
In October of 2012, T-Mobile purchased MetroPCS despite their seemingly incompatible networks. T-Mobile put the purchase to good use, however, finally adding 4G to their network instead of blatantly lying up to this point. Not to be outdone, Sprint announced a purchase by Softbank just a few days later. Dish Network began their interest in telecom by offering a bid against Softbank. This wasn't Dish's only challenge, and the other came against Sprint itself, making an offer on Clearwire, which Sprint was in the process of purchasing.
When the Softbank-Sprint merger was approved, Softbank set their sights on T-Mobile, beginning their 2nd attempt at a life-saving merger. These talks never went anywhere, and T-Mobile instead rolled out their Un-carrier marketing, attempting to separate themselves from the big 3 instead of attempting to join them. Meanwhile, Dish Network also lost Clearwire to Sprint, leaving them with a lot of exposure and zero result in the mobile world.
Now, here we are 5 years after the beginning of this weird drama, and Dish Network has found itself a third acquisition target, and T-Mobile has found themselves a third suitor. Will the third time be the charm for both of these companies, or will lightning refuse to strike on a successful merger for either of these companies? It is likely the latter, as management for both companies seems to be the limiting factor, but maybe when 4 failures add up, it becomes the catalyst for success. I wouldn't hold my breath on it, though.