Verizon’s interest in Dish Network
During the Goldman Sachs Communacopia Conference held September 17, 2015, Lowell McAdam, Verizon’s (VZ) CEO (chief executive officer) and chairman, talked about a possible deal between Verizon and Dish Network (DISH). Talking about Dish, Lowell said, “I think they’ve got a very good satellite business. Charlie has built a great business there.” He added, “the spectrum that he has, we’ve had discussions about how we can provide him megabytes and he can pay for it with spectrum. Those sorts of options are still open to us. But to get the spectrum by buying the entire company isn’t something that we are interested in.”
What can Dish’s spectrum portfolio offer Verizon?
Dish has a significant proportion of mid-band, AWS (advanced wireless services) spectrum holdings in its portfolio. In the FCC (Federal Communications Commission) AWS-3 spectrum auction, Dish was the second-highest bidder for the spectrum holdings. It won spectrum holdings worth ~$13.3 billion through two entities.
In that auction, AT&T (T) won the most spectrum holdings, worth ~$18.2 billion. Verizon won the third-highest amount of spectrum holdings during the auction, worth ~$10.4 billion.
From the FCC’s AWS-3 spectrum auction, Dish won 25 MHz (megahertz) of holdings. Earlier, as of June 2014, the satellite TV provider had a significant ~50 MHz of mid-band spectrum holdings. It also had ~4.6 MHz of spectrum holdings in the low-band capacity as of that period.
You may consider taking on diversified exposure to Verizon by investing in the iShares Russell 1000 Growth ETF (IWF). The ETF held ~1.7% in the telecom company on August 31, 2015. However, if you want to further diversify your risk originating from exposure to Verizon, consider investing in the iShares Russell 1000 ETF (IWB). Verizon contributed to ~0.9% of IWB’s holdings on the same date.