Citigroup says that after it finishes digesting AOL, Verizon (NYSE: VZ) should seek to acquire Dish Network (NASDAQ: DISH).
"This AOL deal suggests a legacy business did not get in the way of Verizon's strategic aspirations," wrote Citigroup analyst Michael Rollins in a report sent to investors last week, after Verizon announced its $4.4 billion deal to acquire AOL.
"In contrast, Dish has highly valuable and strategic mobile spectrum and also owns a linear video business," Rollins added. "Verizon should consider the purchase of Dish sooner than later, which could elevate its wireless and OTT video strategies even further."
Dish closed the first quarter with 13.84 million subscribers, down from 14.1 million the prior Q1.
The acquisition of the satellite company wouldn't provide Verizon with the same pay-TV footprint currently being integrated by top competitor AT&T (NYSE: T), which will get more than 20 million video subs when its $49 billion DirecTV (NASDAQ: DTV) purchase closes in a few weeks.
However, Dish's acquired wireless spectrum—and upcoming plans to enter the wireless market—add a strategic element to a Verizon-Dish deal not found in AT&T-DirecTV.
For more:
- read this Investors Business Daily report
Related links:
Verizon's $4.4B AOL acquisition gives it immediate advanced-advertising edge in the pay-TV market
Verizon's Stratton: Our primary focus is with AOL purchase is mobile-first video
Verizon to acquire AOL for $4.4B