Dish's Ergen Says Banks Lined Up to Loan $10 Billion for Wireless Network

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 [e-mail]

(END) Dow Jones Newswires

December 17, 2019 19:13 ET (00:13 GMT)

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