Between a Rock and a Hard…Dish: DISH Network Corp. (DISH), Sprint Nextel Corporation (S), Clearwire Corporation (CLWR)

Dish Networks has always been a disruptive outsider, ever since its founding in the back of Charlie Ergen’s truck in 1980.  The company is the third largest domestic pay-TV provider, offering 270 basic channels of satellite broadcasting, as well as video streaming and broadband internet service in select markets.  DISH Network Corp. (NASDAQ:DISH) is also a technology innovator, including its Hopper set-top box that allows customers to receive programming in multiple rooms and watch recorded programming without commercial interruptions.  Network television has taken a negative, lawsuit-happy view of the Hopper, but customers are certainly pleased.

In FY2012, Dish’s growth stagnated as the domestic market for pay-TV has limited upside potential.  For the period, the company reported a 1.6% increase in revenues, but its adjusted operating income declined by 16.7%.  The company suffered from lower profitability, due to increases in programming and subscriber acquisition costs.  In addition, the company incurred higher expenses as it restructures the Blockbuster video business.

Given the constraints on its core business, DISH Network Corp. (NASDAQ:DISH) has been looking elsewhere for growth, including the purchase of Blockbuster in 2011 and the purchase of wireless spectrum in 2012.  It launched satellite broadband service in September 2012, which adds to the existing traditional broadband service that Dish provides in select states.  An investment in Clearwire would complement Dish’s current wireless spectrum assets and help it to build a national network.

Clearwire is a speculative play at best, although it will surely end up as part of another corporate empire.  While Sprint holds most of the cards with its 50% stake in Clearwire, it might have to offer a slightly higher price to appease the majority of outside shareholders.  If investors want to bet on a horse in this race, though, Dish Networks is the better choice since it looks like a winner with or without Clearwire.

The article Between a Rock and a Hard…Dish originally appeared on Fool.com.

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