On Friday, Dish Network announced that it will enter the U.S. wireless market as the fourth nationwide facilities-based network competitor after reaching agreements with T-Mobile, Sprint and, most importantly, the Antitrust Division of the U.S. Department of Justice. Dish made commitments to the FCC that it will deploy 5G coverage serving 70 percent of the U.S. population by June 2023.
As previously reported, Dish will purchase the prepaid businesses of Sprint, including Boost Mobile and Virgin Mobile, which serve more than 9.3 million customers in all 50 states and Puerto Rico. Dish will receive more than 400 employees and nationwide independent retail network that supports more than 7,500 retail outlets.
Going forward, Dish will activate new wireless customers on the New T-Mobile network, existing prepaid customers on the Sprint legacy network will be moved to the New T-Mobile network and eventually to the Dish’s own physical network.
The deal adds a nationwide swathe of 800 MHz spectrum to Dish’s existing 600 MHz and 700 MHz low-band holdings, as well as its AWS-4 and AWS H Block mid-band offerings. DISH has committed to new buildout schedules associated with its 600 MHz, AWS-4, 700 MHz E Block and AWS H Block licenses.
The new commitments require DISH to use its spectrum to deploy a nationwide 5G broadband network covering at least 70 percent of the U.S. population by June 14, 2023, or pay the U.S. Treasury of up to $2.2 billion.
Dish Changing Course
Light Reading published a question and answer piece with with Dish Chairman Charlie Ergen and Executive Vice President Tom Cullen on Friday. Not surprising, according to the interview, Dish is no longer going to be pursuing the deployment of narrowband Internet of Things network on its spectrum, which many saw as a license-save deployment at best.
“Assuming the FCC approves this transaction, which still has to be done, then we will suspend work on the NB-IoT and start to convert that to the 5G stand-alone,” he said.
According to the Light Reading interview, Ergen said he believes Dish can be competitive in the consumer handsets an MVNO and building out a separate network, on a city-by-city basis.
“Now, with the jumpstart with 9.3 million customers, and access to the T-Mobile network on a national basis, phone will certainly be a short-term focus, added to our business plans from where we thought we were gonna go,” he said. IoT is still part of the long-term plan, he added.
To pay for the 5G buildout, Dish has $3 billion on its balance sheets and generates $1.5 billion from its core business. It will have no trouble raising equity, as well, Ergen said.
MoffittNathanson said it is doubtful the addition of Dish as the fourth facilities-based nationwide wireless provider will add meaningful competition to the market, which still must be proven to the states that have filed the lawsuit against the Sprint/T-Mobile merger.
“Replacing a competitor that is over-levered but has 50 million-plus subscribers, thousands of retail outlets, and, most importantly, some 50,000 cell sites with ground facilities, with a new competitor that is equally levered but has no network, no cell sites, no ground facilities, one fifth as many subscribers, and only a temporary resale agreement (to tide them over while they build a network that the FCC can require them to build ANYWAY just by enforcing the build-out rules that are already there) doesn’t sound very credible,” the firm wrote on its website.