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Satellite-guru Charlie Ergen just saw his wireless investment skyrocket.
Dish Network, the satellite-TV company controlled by Ergen, won approval from the Federal Communications Commission late Tuesday to build out its own nationwide wireless network. The government nod allows him to use a slice of satellite spectrum to provide cell-phone service.
Whether Ergen ends up launching his own service, putting him in competition with Verizon, AT&T and Sprint, or sells the spectrum, he’s looking at a big windfall. The spectrum that he paid roughly $3 billion for is now worth at least $7 billion, according to sources.
For years, Ergen has been buying up spectrum — in some cases from bankrupt satellite rivals — in an effort to cobble together his own service.
Dish’s shares rose 1.8 percent, or 65 cents, yesterday to $36.67.
The value of the spectrum could be limited, however, by any restrictions that the government places on the use of those airwaves.
Sources expect the FCC will put some restrictions in place to protect a neighboring band of government -owned spectrum that it plans to auction off next year.
The government spectrum is sandwiched between blocks owned by Dish and Sprint, making it valuable to both parties.
Both have reason to buy that government spectrum, worth as much as $2 billion, and combine it with their neighboring spectrum so they can deliver more data through their networks, sources said.
At the same time, Sprint is making an offer for the 49 percent of Internet service provider Clearwire it does not already own, partially to deal with Ergen, said one source.
Dish also owns Clearwire debt. Now that Ergen has a license to operate a mobile-phone network, he can use that debt as leverage to buy Clearwire spectrum and combine it with his wireless holdings.
Dish declined to comment about Clearwire debt.