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 last Wednesday, Ryvicker noted that Dish Network currently has a distribution partnership with Frontier and the additional lines could lead to more 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 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 mid-2010. The deal is expected to take about one year to close.
Whatever the time-lag, Ryvicker noted that Dish can use all of the subscribers it can get — it lost about 94,000 customers in Q1.
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