The big question in the wireless industry is no longer what will Charlie Ergen do, but when will he do it. During Dish Network’s fourth quarter earnings call, top executives did not give up too many details but revealed that the new 5G network will use open RAN vender-neutral technology.
“We want to start deploying later in 2020,” said Timothy Messner, Dish general counsel. “We’re very cognizant of the FCC obligations that we’ve made, and we actually look forward to beating them.”
Job one is to integrate with the Boost Mobile, a mobile virtual network operator, so Dish will be operational as soon as it is possible, according to Messner. The architecture of the network must also be finalized, contracts with multiple vendors must be finalized and deployments must be planned.
Erik Carlson, Dish president and CEO, did not speak with a much of a sense of urgency when it came to tower deployment.
“The big picture is, because we have the use the T-Mobile network for seven years along with some of the towers, we have a pretty big safety net. It gives [us] a little bit more leeway in terms of how we build our network,” Carlson said.
As part of the Sprint/T-Mobile merger, Dish will have access to 25,000 towers and retail stores that will be vacated by Sprint. Perhaps the speed of Dish’s buildout will be tempered by the pace of T-Mobile’s decommissioning of Sprint sites. Ergen, Dish chairman, would not signal his next move concerning tower deployment, but he did note that using Sprint’s towers, many of which are owned by Crown Castle, would be economical.
“T-Mobile is not allowed to squat on the towers, and they are required to give us notice when they’re going to vacate a tower,” Ergen said. “That probably helps on the margin on our buildout and perhaps reduces some of our costs.”
John Swieringa, chief operating officer at Dish, added that the newly available RAD centers of the decommissioned Sprint sites would be at attractive heights, so Dish will be watching closely as the towers become open.
Dish’s strategy is to use its ample spectrum (100 megahertz in some markets) over a low-cost network, which will compete on price. To do this , the carrier will employ alternate methods to build its network for less money through strategic partners and operate it for less. The architecture that Dish has decided on is open RAN (ORAN), which also lowers costs.
“We have fewer people because of automation and our network is primarily going to be software and will be in the cloud, versus the carriers’ hardware networks today,” Ergen said.
Carlson added that none of the existing carriers use ORAN, which requires less proprietary equipment. “But that is without question the way a modern network should be architected. And once you architect it that way, it opens up a whole different set of range of options,” he said.
Marc Rouanne, Dish chief network officer, explained that Dish has been working on ORAN for the last few months and that he sees it as a trend in wireless infrastructure because it reduces the changeout of radios as a network evolves.
“You put the radio on top of the tower and then you can do whatever you want on the rest of the network. It will never impact again your radio. So, you can choose the vendors, but you can also have long-term sustainability of your radio deployments,” he said.
Quotes courtesy The Motley Fool.
The federal trial to decide the fate of the State’s lawsuit against the Sprint/T-Mobile provided some new details on how Charlie Ergen, CEO of Dish Network, will build out his 5G network, if the merger goes through.
The company’s strategy for its 5G network calls for 2,500 towers by 2021, 10,000 sites by 2022, 15,000 sites by 2023, 30,000 sites by 2023 and eventually 75,000 sites, according to statistics provided by New Street Research (NSR). Dish’s NB-IoT network will comprise 1,000 sites.
“The inclusion of Dish into the T-Mobile / Sprint merger is positive for the towers in three respects: first, it eliminates the prospect of the worst-case scenario for the towers (a T-Mobile / Sprint deal without conditions); second, it will likely drive a faster network build from Dish; and third, the towers will likely capture more revenue from Dish building independently rather than with a network partner as we previously assumed,” Spencer Kurn, NSR analyst, wrote.
Since Ergen’s testimony, the Wall Street Journal reported that banks are willing to lend Ergen $10 billion to build the 5G network.
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.”