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By Liana B. Baker and Sinead Carew
June 26 (Reuters) - Dish Network Corp has bowed outof the battle for mobile service provider Clearwire Corp, marking the second major blow in less than a weekagainst Dish chairman and founder Charlie Ergen and his plan toexpand into wireless.
The decision, announced on Wednesday, officially put an endto a bidding war between Dish and Clearwire's majority ownerSprint Nextel Corp, and raised questions about whatoptions Ergen has left in as he tries to expand beyond satelliteTV services into the U.S. wireless market.
Dish was driven out by Sprint's increased offer forClearwire the week before. Sprint's offer of $5per share trumped the $4.40 per share proposal from Dish and wonthe support of a key group of dissident Clearwire shareholders.
Analysts and investors have been questioning what kind ofdeal or partnership Ergen will look for next. Several analystshave said his best option could be to make a bid for No. 4 U.S.mobile provider T-Mobile US Inc, whose majorityshareholder is Deutsche Telekom AG. Dish declined tocomment on the prospects for a T-Mobile deal or on its futureplans for wireless.
"It's an option," said a source familiar with the matter,referring to a T-Mobile US deal.
But the person, who asked not to be named, added thatT-Mobile was not the only possible partner. The source notedthat Ergen has always said he would pursue all of his options.
As recently as 2011, Deutsche Telekom tried to leave theU.S. market and some analysts saw the merger of T-Mobile USAwith smaller U.S. company MetroPCS earlier this year as anotherpossible step towards an ultimate exit.
Dish has already invested more than $3 billion to buy itsown wireless airwaves, but it has no experience buildingwireless services or competing with large rivals such as VerizonWireless and AT&T Inc.
As a result Ergen has said in the past he would prefer notto enter the market alone and would favor a partnership with anestablished operator.
"I don't think they've given up on wireless. They need tohave access to one of the wireless operators' subscriber base,"Brean Capital analyst Todd Mitchell said referring to Dish.
Sprint and Dish had been battling since January overClearwire's valuable wireless airwaves and vying to buy outminority shareholders.
On Friday last week, Dish also retreated from a largerbattle to buy No. 3 U.S. mobile provider Sprint. Sprintshareholders voted on Tuesday in favor of a sweetened takeoveroffer from Japan's SoftBank's Corp.
Clearwire's minority shareholders will vote on the Sprintbid on July 8. Sprint had to raise its offer for Clearwire threetimes because of pressure from shareholders.
