By Dhirendra Tripathi
Investing.com – Dish Network stock (NASDAQ:DISH) jumped 3% on Wednesday on a report in the New York Post that it is in renewed talks with DirecTV for a merger.
The satellite-TV giants tried a combination around two decades ago but the Federal Communications Commission and the Justice Department red-flagged it. Two years ago, the DOJ also quietly warned executives off a prospective deal, concerned about the nascent rollout of 5G, the report said.
According to the report, officials are optimistic of about the this time as the market power of the companies has waned. The Biden administration’s infrastructure package allocates $65 billion to build out rural broadband. Once faster internet reaches more rural areas, the people there could look to cut the cord and buy streaming packages, providing competition to the satellite providers and addressing concerns over market monopoly.
The transaction could also help the country’s patchy rollout of 5G services, an argument that could go down well with the regulators at the time of approval, the report said.
Private equity giant TPG, a 30% shareholder of DirecTV, is pushing the deal even as Dish Chairman Charlie Ergen’s demands for a significant voting share and a say in key decision-making at the combined company are dragging the deal.
DirecTV currently has just over 15 million customers while Dish has 8.4 million.