Dish Picking Up EchoStar OTT, Spectrum Assets in Swap

Dish Network will pick up some EchoStar assets, including its 10 percent of Sling TV and wireless spectrum licenses covering four markets in the 28 GHz band, in exchange for Dish's 80 percent economic interest in Hughes Retail Group held in the form of a tracking stock, Dish said in a news release Tuesday. Dish said it also will take over EchoStar Technologies' hardware and software development group, its managed fiber backhaul network serving all U.S. designated market areas, its national and regional uplink business, over-the-top development group and some real estate properties. Dish said it will still market EchoStar satellite broadband under the brand dishNET to rural customers. It said the deal is expected to close in Q1. The deal vertically integrates "all the elements that define our customer experience -- one team will deliver the full DISH and Sling TV experience end to end," Dish President Erik Carlson said. "Not only do we gain full control of product development roadmap for DBS and Sling TV but we also anticipate achieving operational efficiencies." In a note to investors Tuesday, Wells Fargo analyst Marci Ryvicker said the motivation for the swap is unclear, "but our gut tells us Charlie [Ergen, Dish and EchoStar chairman,] is cleaning these two companies up for a reason … perhaps this could be related to something transformative post the broadcast incentive auction."