In a surprise move, US satellite television company Dish Network has proposed a $25.5 billion merger with US number-three operator Sprint, putting it in direct competition with an offer from Japan’s Softbank.

According to Dish the deal would create the only company able to offer “a fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services”.

Dish said its offer represents a 13 per cent premium on the existing offer from Softbank, which agreed a $20 billion deal with Sprint in October for a 70 per cent stake in the US operator.

It also said that shareholders will benefit from “a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal”.

Dish is proposing a bid of $17.3 billion in cash and $8.2 billion in stock. It is planning to fund the cash portion of its offer with $8.2 billion of balance sheet cash and additional debt financing.

The satellite TV company is offering shareholders 18 per cent more cash than the $4.03 per share offered by Softbank as well as an equity portion of the combined Dish-Sprint business of 32 per cent, compared to 30 per cent in Sprint alone with the Softbank deal.

The combined company would deliver “substantial synergies and growth opportunities” worth an estimated $37 billion in net present value, including cost savings in the region of $11 billion.

Dish said it anticipates that the pending deal for Sprint to acquire the shares it does not already own in Clearwire would be completed in the event of its proposal being accepted.

Dish chairman Charlie Ergen said his company’s proposal is “a superior alternative” to SoftBank’s offer: “Sprint shareholders will benefit from a higher price with more cash while also creating the opportunity to participate more meaningfully in a combined Dish/Sprint with a significantly-enhanced strategic position and substantial synergies that are not attainable through the pending SoftBank proposal.”

Dish was last week linked with a deal to merge with US number-four operator T-Mobile USA. Sprint has also been linked with such a deal.