Dish's Ergen Says Banks Lined Up to Loan $10 Billion for Wireless Network
December 17 2019 - 7:28PM
Dow Jones News
By Drew FitzGerald
Dish Network Corp. Chairman Charlie Ergen said he has letters
from three banks prepared to offer $10 billion to fund the
company's new wireless network, as the billionaire appeared in
federal court Tuesday to testify in support of T-Mobile US Inc.'s
purchase of rival Sprint Corp.
T-Mobile and Sprint have spent the past year and a half
defending their plan to join forces against a coalition of state
attorneys general suing to block it, arguing the merger will hurt
competition in the consumer wireless market.
Dish agreed earlier this year to buy Sprint assets to jump-start
its plan to become a wireless carrier. Federal regulators approved
that arrangement, but officials from 13 states and the District of
Columbia remained unconvinced.
The letters displayed in court said each bank was "highly
confident" it could lend Dish $10 billion for its wireless
network.
Mr. Ergen said the letters, dated Dec. 9, weren't commitments
and that he wouldn't borrow the money without knowing the outcome
of the federal trial.
The Dish chairman also said his family invested about $600
million in a recent $1 billion stock offering the company opened to
prepare for construction of its wireless network. Mr. Ergen
co-founded the satellite-TV company and controls more than half of
its shares.
The testimony late Tuesday offered Mr. Ergen the opportunity to
defend his plan against allegations from the states and some
companies that he makes empty promises to the government regarding
his intent to start a wireless service.
The telecom executive said Dish's agreements with federal
authorities force him to build a working network or face $2 billion
in penalties and the forfeiture of more valuable wireless spectrum
licenses.
"It would be financial suicide, and we're not suicidal," he
said.
Judge Victor Marrero asked Mr. Ergen about his doubters during
his testimony, saying he had heard earlier testimony that suggested
Dish had backed away from past commitments or hadn't acted in good
faith.
Mr. Ergen said his detractors are often competitors trying to
prevent his entry into the market, often by badmouthing his company
to reporters or financial analysts.
He pointed to statements from the Federal Communications
Commission as proof that the company has met its legal
obligations.
"They don't believe Dish is a bad company, as some people might
want to whisper," he said.
Attorneys for the states on Monday offered evidence that Sprint
Chairman Marcelo Claure was among the doubters. He accused Dish of
playing games with the government by planning a "meaningless, thin
network." Mr. Claure said Monday he was referring to old plans.
Tuesday's testimony ended before attorneys for the states could
challenge Mr. Ergen. He is expected to continue testifying
Wednesday, though some of the discussion will be conducted in
private to protect information Dish deemed too sensitive to share
with competitors.
Judge Marrero said he would hear some of the testimony behind
closed doors but might release a redacted transcript of the
proceedings.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
December 17, 2019 19:13 ET (00:13 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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