Dish Network bids $1.38B for TerreStar Networks

TerreStar Networks on Wednesday revealed that Dish Network had placed an opening bid of $1.38 billion for the ailing telecommunications company’s assets through a bankruptcy auction, according to Reuters. TerreStar has operated under bankruptcy protection since Oct. 19.

Dish Networks likely wants TerreStar’s assests so it can acquire the company’s sought-after wireless spectrum, which could be used to build a wireless broadband network. The frequencies that Dish and TerreStar own are similar to what Sprint offers with its 3G phone and data service, according to TMC Net.

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Dish will allow TerreStar to take more bids until June 27, and a court-supervised auction will take place June 30. Any bid over Dish’s initial offer will have to top Dish’s by $55.5 million. If Dish does not win the auction, it will receive a breakup fee of $27.5 million.

Dish has made quite a few acquisitions in the last few months. In February, it purchased Hughes Communications, a satellite ISP, for $2.1 billion. In March, it bought DBSD North America’s assets, which are quite similar to TerreStar’s holdings, for $1 billion. And in April, Dish acquired distressed movie rental chain Blockbuster for $228 million.

It’s unclear what exactly Dish wants with TerreStar’s assets, but my shot-in-the-dark guess would be offering its own branded version of wireless Internet access over 3G to its customers in a bundle-type package. Dish currently offers Internet, phone, and TV bundle packages but uses outside providers like Verizon and AT&T for Internet and phone access. It also offers high-speed Internet via satellite through WildBlue.

Are you a Dish customer? What do you make of its recent moves?