Dish raising $2.3 billion for 4G strategy

Englewood, Colo., April 3, 2013--Dish Network Corp. is offering up to US $2.3 billion in senior notes in order to have funds for its 4G goals according to analysts.. Dish said on Wednesday it was offering $1.1 billion aggregate principal amount of 5.125% senior notes due 2020 and another US  $1.2 billion aggregate principal amount of 4.250% senior notes due 2018. Dish said the 2020 and the 2018 notes will be issued at an issue price of 100%.

In a  statement, Dish said the net proceeds of the offering will be used for general corporate purposes, which may include wireless and spectrum-related strategic transactions. Industry analysts widely believe the proceeds will be used by Dish to create a nationwide 4G LTE network capable of rivaling AT&T and Verizon. This will, however, require Dish to shore up its spectrum acquisition by partnering, for example, with Clearwire Corp., a provider of 4G wireless broadband services.

Clearwire  holds one of the deepest portfolio of wireless spectrum available for data services in the U.S. serving retail customers through its own Clear brand. It also sells wholesale with some of the leading companies in the retail, technology and telecommunications industries, including Sprint and NetZero.

Clearwire,  headquartered in Bellevue, Wash, is constructing a next-generation 4G LTE Advanced-ready network to address the capacity needs of the market, and is also working closely with the Global TDD-LTE Initiative to further the TDD-LTE ecosystem. 

But Sprint Nextel Corp. already owns at least 50 percent stake in Clearwire and this could limit Clearwire's ability to sign a deal with Dish. In January 8 this year, Clearwire disclosed that it received an offer from Dish to purchase some of its non-Sprint class A stocks.

The debt offering, expected to close on April 5, will enable Dish to raise cash for additional spectrum acquisitions. If a wholesale arrangement with Clearwire is no longer feasible, Dish could vie in an FCC auction, such as the one being planned for the broadcaster airwaves that were freed up by the switch to digital TV.