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.
March 28, 2017 —
I have talked regularly about the marriage between the wireless carriers and the media companies and how the next iteration of content providers will no longer be wireless or media stand-alone entities. They have been called various new names, most of which I simply glance over, but the numbers that support this evolution can be staggering. Most of us are all aware of the flurry of mergers and acquisitions over the past couple of years. Well, add another one to that wheelhouse – Dish Network is looking at raising another billion dollars towards its wireless ventures.
The details are a bit sketchy, but it plans to issue convertible notes, the details of which won’t be inked until a few more details are worked out.
And Dish isn’t talking about who or what quite yet. It seems just to be positioning to pounce when the time is right.
The billion-dollar figure tells one just how much this new market is worth. That, on top of the $3-billion round that closed at the end of last year. That is the most notable issue in all of this. but Dish already has over $5 billion on the balance sheets. Makes one wonder just what else they are stashing money away for.
True, they need to meet a couple of mandates, like the obligation to meet FCC buildout requirements for the spectrum it already owns and the $1.5-billion on upfront auction payments. Those buildout rules stipulate that the satellite-TV provider must attain a 40 percent signal coverage on the 700 MHz E-Block licenses it owns by the end of the month and reach a 70 percent buildout by March 2020. And Dish faces similar mandates for its licenses in the AWS-4 band. But with all the money they have in the coffer, and perhaps I’m reading too much into this, but I have this gut feeling that something big is about to go down with Dish.
The Third Generation Partnership Project (3GPP) global wireless standards body has approved specifications that will enable the development of devices and infrastructure in Band 70, which combines DISH’s current AWS-4 spectrum as downlink (2000-2020 MHz), DISH’s H block downlink spectrum (1995-2000 MHz), and unpaired AWS-3 uplink spectrum (1695-1710 MHz).
“Band 70 packages what would otherwise be underutilized spectrum, paving the way for an ecosystem to better serve consumer demands for downlink,” said Tom Cullen, DISH executive vice president of Corporate Development.
DISH and the entities in which it has invested have on average almost 80 MHz of spectrum nationwide, covering over 23 billion MHz-POPs.