DDB Chicago, RadiumOne, The Media Kitchen and others discuss what a merger between T-Mobile and Dish Network would mean for the industry

Yesterday, rumors began to surface that T-Mobile and Dish Network may be considering a merger.

The merger would be a huge one as each brand is worth more than $30bn.

In addition, it would bring mobile capabilities to satellite and satellite capabilities to mobile – allowing the giant company to offer more than ever before.

Industry leaders from DDB Chicago, RadiumOne, The Media Kitchen and others shared their thoughts on the potential merger with The Drum.

Eric Bader, chief marketing officer, RadiumOne

"These deals hinge on data and distribution. Advertisers want more personalized targeting, not just more audience tonnage. If this combined company is able to use registered user data and can bridge the screens that consumers use – from TV to online to mobile, they can offer advertisers more opportunities to reach better defined audiences. But, using that customer data is not a sure thing and regulations and consumer sentiment differs in places such as the US, Germany and the UK. The best outcome for advertisers is buying from one source and reaching larger but better-defined audiences across the screens that consumers use."

Azher Ahmed, director of digital operations, DDB Chicago

"Ergen has a history of being a maverick. It’ll be interesting to see where they go with it. At the surface, the move seems to position them as competitors to Verizon, AT&T and other telcos that have a strong hold in telco & wireless. I think Charlie is thinking, however, of the infrastructural play. Combined wireless & satellite infrastructure opens up a world of possibilities that competitors haven’t, unfortunately, taken clear advantage of. With things like integrated place-shifting (via their Sling acquisition) Dish could, for example, offer unlimited slinging to wireless customers to grow market share. A “TV anywhere" provider could be an incredibly compelling selling proposition. That could easily push Dish to #1 in satellite and potentially even unseat an AT&T/Verizon from the wireless perspective."

Andrew Van Noy, chief executive officer, Warp 9, Inc.

"I generally love merger and acquisition (M&A) deals as it allows companies to leverage the services and products from both companies, into one consolidated offering. Typically, when smaller companies merge, the value to the end customer can be substantial. However, large M&A's, as in the case of T-Mobile/Dish Network merger, usually maximizes value to shareholders first, and customers second. If you are a shareholder to either of these companies, you are probably ecstatic. If you are a customer, the effect will be largely unknown. I assume they will roll out a packaged deal to existing customers that will make consuming products from both companies attractive. Will the savings or incentives be enough to get customers to jump ship from other providers? Most likely, there will be a large marketing push for new customer acquisition. The issue with such large companies merging can be daunting, considering the amount of control they will have in the market."

Tom Buontempo, president, Attention

"The T-Mobile/Dish Network merger follows the industry-wide pattern of consolidation, which is tying together the content and device ecosystem around the individual. This means channel silos are no longer. The consumer is always-on and everything is measurable. From our perspective, we’ve been forced to think this way for quite some time as we believe social is a behavior, not a channel, which connects the customer journey through shared content. Because we organize around the individual we need to understand where they sit in their relationship with us and what makes most sense to deliver when. We need to listen to the community, act quickly and effectively. We know more about the consumer than we ever did before so the bar is higher. Data and creative need to sit closer and, as such, we’ll likely see more agencies accelerate tying together nimble media, data and content/creative teams in an effort to make sense of the shift."

Barry Lowenthal, president, The Media Kitchen

"I think the Dish-T-Mobile merger is really interesting for a number of reasons. Satellite TV matters mostly for households that can’t be served by cable, i.e. rural markets, or fans of special kinds of programs not carried by cable. But increasingly as mobile broadband coverage increases and Americans are connecting to the Internet more frequently through their mobile devices, satellite TV will become less relevant. But their assets, especially the wireless spectrum licenses are incredibly valuable to companies like T-Mobile who are looking to expand their wireless services. Additionally, both T-Mobile and Dish have very comprehensive customer files that can be used for cross-selling (mobile+TV) while their capabilities are expanded.The entire media marketplace, especially the TV marketplace, is being upended by mobile so it’s no surprise why T-Mobile is looking to further monetize their core capability and it’s no surprise that Dish is looking for a mobile protector."

Scott R. Singer, managing director, DDG

"The industrial logic for combining a mobile operator with a satellite distributor of content is primarily one of consumer sales and marketing benefits. A bundled package of cellular service with that of satellite delivered video, or even a streamed offering of network programming to wireless customers is of huge value. Satellite services are pure video plays. As we see HBO, CBS and now Showtime creating OTT offerings direct to consumers, the need for video middlemen is coming into question. Broadband distribution, not video, is the key product for cable operators. Satellite does not have that benefit. The co-marketing benefits are also large, not to mention the elimination of duplicative corporate, billing and customer service overhead. But, what may be the most beneficial is the fact that Millennials will be approaching their residential home buying and family formation years in the not too distant future. Their mobile phones are the first screen and the remote controls of their life. With that in hand coupled with a robust wireless video product, a combined T-Mobile/Dish offering may just win their hearts, especially given T-Mobile's consumer friendly data approach."

John Levy, executive producer, Click 3X

"They are both subscription services that are facing a similar problem. Both companies' competitors have a competitive advantage in that they offer a fuller spectrum of services. Both have also seen their subscribers esseentially plateau since 2009. Strategically, the merger makes a lot of sense in that the new company will have a much broader subscription base, and considering they offer complimentary services, they have the opportunity to market to each other's sub base and ideally double their subscribers. Furthermore what they don't convert in existing subs they can make up by going head to head with companies like Verizon to win over new subscribers. My guess is that they will

follow up the merger with a campaign to buy consumers out of their current contracts with other media conglomerates."

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.