Dish Network has named wireless industry veteran Stephen Bye to its executive wireless leadership team. Bye will serve as chief commercial officer. He will join Dish as executive vice presidents and report to Dish co-founder and chairman Charlie Ergen.
“Dish is positioned to fundamentally redefine how we think about wireless at all levels, from the retail consumer to the largest enterprise and governmental use cases,” said Bye. “This greenfield network, the first in a generation, will be an engine of innovation for our economy.”
Bye, most recently CEO of Connectivity Wireless, is a 28-year veteran of telecommunications and wireless who served as President of C-Spire and CTO of Sprint. He will lead the Dish wireless enterprise development team. The team’s mission is to define, develop and market commercial applications, as well as establish strategic enterprise partnerships that are able to harness the unique architecture of DISH’s software-defined 5G broadband network.
“Stephen shares our vision for the transformative power our 5G network will deliver to consumers and enterprises of all types,” said Ergen. “He will play a critical role in developing and commercializing innovative and disruptive applications built around our unique capabilities like network slicing, flexible capacity management and massive connectivity.”
Marc Rouanne was also named to the executive wireless leadership team. Rouanne will serve as chief network officer and will also report to Ergen.
“There isn’t a pattern for the kind of network we are building in the United States and we need the best people in the world to make our vision of a virtualized standalone 5G broadband network a reality,” said Ergen. “Marc and Stephen will help lead our work to redefine the American wireless landscape to the benefit of consumers.”
As CNO, Rouanne will oversee the strategy and architecture of the network, its core, and its cloud and edge strategies.
He brings more than 20 years of international management experience in the telecommunications industry, having held executive positions including president of Mobile Networks and chief innovation and operating officer of Nokia and chairman of the board of Alcatel-Lucent. He is an advocate of opening the traditionally closed systems in wireless networks. Under his leadership, Nokia was the first large telecommunications vendor to join groups such as the Telecom Infra Project (TIP), xRAN Forum and the O-RAN Alliance.
Rouanne and Bye are expected to join DISH in December.
It’s not official, but it feels real. After months of speculation, Bloomberg Asia is reporting that Dish Network has agreed to buy wireless assets from T-Mobile and Sprint in a $5 billion deal creating a fourth carrier designed to convince the U.S. Department of Justice (DoJ) to bless the merger of the mobile phone carriers.
It’s not the final step before the merger of T-Mobile and Sprint becomes a reality, but it would appear to be a big one. The DoJ must still okay the merger and the states would have to withdraw their lawsuit. Then we can go back to the full-time task of wondering what Charlie Ergen will do next.
Dish would pay $1.5 billion to receive several prepaid mobile businesses and $3.5 billion for spectrum. In return, according to Bloomberg, the satellite TV provider would receive a seven-year wholesale agreement allowing it to sell T-Mobile wireless service under its brand and a three-year service agreement from T-Mobile to provide operational support.
Solving one of the final reported sticking points, Dish will not be allowed to sell the assets or hand over control of the agreement to a third party for three years, Bloomberg reported.
One of the reasons this year-plus roller coaster of negotiations feels like it is coming to an end stems from reports last week that the DoJ said it would oppose the merger, if T-Mobile and Sprint had did not finalize their deal with Dish within a week. A deadline! Who knew that would work?
New Street Research summarized what Dish will receive: 9 million prepaid subs, mobile virtual network operator (MVNO) status for 7 years, 14 megahertz of 800 MHz band spectrum and eSIM support. The firm also reported that there would be two payments: $1.4 billion now for prepaid subs and then $3.6 billion in three years for spectrum when it has been cleared.
What about Charter?
Adding another wrinkle to the story, Reuters reported that the Justice Department did not reply to Charter Communications’ proposal to buy the carriers’ telecom assets.
“The Justice Department’s lack of response to Charter could raise concerns among critics of the $26.5 billion merger of wireless carriers T-Mobile and Sprint that officials did not weigh all divestiture offers before deciding on a deal with Dish,” Reuters wrote.
And don’t forget about the lawsuit from several state attorneys general, which is attempting to block the T-Mobile/Sprint merger.
“The merger of T-Mobile and Sprint would stifle competition, cut jobs and harm vulnerable consumers from across the country, so unity among the states will be key in defending our citizens against this power-hungry corporate union,” said New York Attorney General Letitia James. It is not known whether the Dish deal would pacify the state attorney general.
Can Dish Make It as a National Carrier?
New Street Research has published analysis that shows Dish would be a disruptor in the wireless business.
“Dish has a path to an attractive wireless business on their own; one that would result in a value well above where the stock is trading today,” the analysis reads. “If they can secure a network hosting deal with T-Mobile, the business would be more valuable still. We worked with network engineers to determine what it would cost Dish to build and operate a new 5G network. We show that, once fully loaded, Dish would have a lower cost per unit of capacity than any of the four national carriers today. This gives Dish the ability to price aggressively, to fill the network swiftly, and to create tremendous value for themselves at the expense of the existing carriers.”
The news of the breakthrough that may advance the merger was welcome for the wireless industry, but unfortunately, it raises more questions than it answers. Will Dish continue to build out its license-saving internet-of-things network? The DoJ most likely will give it an extension to keep the millions of dollars of spectrum it has accrued.
“The broader question is what will they build and when will they build it?” asked Alex Gellman, CEO and cofounder of Vertical Bridge. “Will they build a 5G network and start transitioning the MVNO customers over? It makes sense if they have the freedom to figure out where most of the traffic is and can start picking off the hottest spots with their own proprietary infrastructure.” Comcast and Charter do not have the right to build their own cores as part of their MVNO deals with Verizon.
Perhaps the biggest questions that need to be answered, according to Gellman, is who does Dish partner with and when? “How quickly does Dish partner with someone to build the new network?” he asked. “Does that partner bring customers, capital or the ability to build? That is the wild card.”
But don’t hold your breath. Gellman said he believes Dish will take its time finding a partner and developing a build strategy. “They will take a measured approach,” he said. “They will get to know the Boost customers and they have seven years to use T-Mobile’s network. One thing is for sure, this deal cements the existence of a fourth carrier. Dish can no longer sell its spectrum to AT&T, Verizon or T-Mobile.
Dish Network is in talks to pay at least $6 billion for assets that T-Mobile US and Sprint, including wireless spectrum and Sprint’s Boost Mobile brand, according a report by Bloomberg News. The deal, which could be announced this week, is being struck to win regulatory approval for their merger.
Last week, Reuters reported that private equity group Apollo Global Management was in talks with Dish to finance a bid for the assets.
The press has been rife with predictions on what deal would gain the Department of Justice’s blessing of the T-Mobile/Sprint merger, but pleasing the states, which have filed their own lawsuit, may be another matter, according to Blair Levin, New Street Research.
“We keep hearing from investors a belief that any deal with DISH that has the blessing of the DOJ and FCC will definitely either cause the states to withdraw or cause them to lose. We think that is wrong,” Levin wrote. “Any deal with DISH weakens the states’ case but as noted below, the states have alleged a number of harms that may not be mitigated sufficiently by the deal.”
DISH Chairman Charlie Ergen discussed his company’s wireless plans in May at this year’s Connectivity Expo in Charlotte, North Carolina. On June 5 and 6, Ergen and representatives of DISH met with FCC Chairman Pai and his staff and later with Wireless Bureau. But that appears to have only whetted the FCC’s appetite for details about the networks that will be built out. The FCC has sent a letter to DISH Network inquiring about its plans to build out its wireless to meet its buildout obligations for its spectrum licenses
The query came, in part, because of failures by the company and its subsidiaries to meet interim construction deadlines for their FCC licenses in the AWS-4, Lower 700 MHz E Block, Multichannel Video Distribution and Data Service and the H Block.
“I am contacting you to request updates and more detailed information on your buildout plans for the 53 megahertz of low- and mid-band spectrum that is apparently lying fallow in these bands,” wrote Donald K. Stockdale, Jr., chief of the FCC’s Wireless Telecommunications Bureau.
The Commission wanted to know about the challenges DISH faces in constructing the network by 2020 and how they may be overcome. In particular, DISH was asked to divulge its technology selection, vendor selection, equipment acquisition, system engineering, site acquisition, equipment testing, and advertisement of service and deployment to customers.
“How will each spectrum license independently be constructed to meet the service requirement?” Stockdale wrote. “Will each and every spectrum band be deployed at each base station? If not, how do you plan to demonstrate that you have met the buildout requirement for each license in each band??”
The FCC asked whether chip sets and developer kits that support the H Block would be available in time to offer customer equipment by April 2022? And whether the architecture for the phase 1 IoT network will need any rule waivers.
DISH Network Chairman Charlie Ergen has left his position as CEO to devote more attention to the company’s wireless business. The company promoted Erik Carlson to president and CEO from president and chief operating officer. Carlson will continue to report to Ergen.
To say that DISH’s wireless operations need some supervision or maybe leadership would be an understatement. DISH is known in the wireless industry mostly for owning a lot of spectrum and for not doing much with it, as well as for failed wireless mergers.
In 2013, it got into bidding wars for both Sprint and Clearwire and lost both. The same year, DISH tested a rural fixed-wireless system with nTelos in Virginia using 2.5 GHz TD-LTE, which was reportedly abandoned two years later.
What DISH has done successfully is amass spectrum. Its cornucopia of frequency licenses includes AWS-4 downlink (2000-2020 MHz), and unpaired AWS-3 uplink (1695-1710 MHz). It spent more than $6B on 600 MHz spectrum in the incentive auction. In 2014, Dish Network bought $1.56B worth of H-block auction in the upper 1.9 GHz band. Dish bought 168 licenses in the 700 MHz E Block spectrum auction for $712 million in 2008.
In 2016, DISH averaged almost 80 MHz of spectrum nationwide, covering more than 23 billion MHz-POPs. That number does not include the 600 MHz frequencies. And the satellite-TV provider faces numerous FCC-imposed deadlines to build out coverage on the spectrum it has purchased.
So, now would be a good time for DISH to move on its spectrum position. Which way it goes is still anyone’s best guess.