Verizon Communications' $5.25 billion stock deal to sell 4.8
million access lines to Frontier Communications could have an additional
beneficiary -- Dish Network -- according to Wachovia Securities broadcast and
cable analyst Marci Ryvicker.
In a research note Wednesday morning, Ryvicker noted that satellite-TV
provider Dish currently has a distribution partnership with Frontier and the
additional lines could lead to additional subscribers.
Ryvicker also noted that the markets being sold to Frontier --
14 states with 2.2 million long-distance customers and 1 million digital subscriber line customers - represent areas with little FiOS overbuild. She
estimated that Verizon FiOS customers from those lines accounted for less than
4% of FiOS Internet customers and less than 3% of FiOS TV customers.
"We would anticipate aggressive marketing of a Dish-Frontier
synthetic Triple Play in these newly acquired areas," Ryvicker wrote. However,
she added that the financial impact of the deal to Dish would not be felt until
the transaction closes, expected within one year.
Dish Network lost about 94,000 customers in the firstquarter
and has been plagued by customer defections since the second quarter of last
year. In February, Dish lost its distribution agreement with telco AT&T, which has also had an
impact on subscriber losses.Verizon and Frontier announced the deal this
morning which would triple Frontier's size and make it the largest U.S.
communications provider focused on rural areas.
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