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What we learned about Dish during the earnings call

With Dish executives leading the company’s quarterly earnings call, details of the plan to crack into the US mobile market were revealed.

The next few years are critical for the US telecoms industry but also the credibility of the FCC and the Department of Justice. Both of these authorities dismissed opposition to the T-Mobile US and Sprint merger, ignoring suggestions it would damage competition. Dish was the reason competition could be maintained, irreversibly changing the US telecoms industry, so it better succeed.

Fortunately, the is being fairly transparent about developments, or certainly more so than most telecoms executives are. But what did we learn from CEO Erik Carlson and Chairman Charlie Ergen last week?

Firstly, $10 billion should be enough to build a nationwide network.

This is a figure which has been banded around quite a lot in recent months without any in-depth explanation, but Ergen believes $10 billion should be enough to meet FCC regulatory requirements and go beyond to create a nationwide network which can compete. There might be a few unforeseen expenditures, spectrum auctions for example, but the team is standing by this estimation.

While the Boost business has not been officially closed yet, the team should have launched in one market by the end of the year, with its own independent core but leaning on the T-Mobile access network. This MVNO agreement will be running for seven years, but the team have already begun talks with tower companies to push forward to create its own network.

What is worth noting is that this work is running independent of the assets which can be purchased from the new T-Mobile company. EVP of Corporate Development Tom Cullen highlighted that deployment planning has begun but once the Boost deal closes, Dish will also have first refusal to acquire cell sites from T-Mobile which are deemed surplus to requirements thanks to the network rationalisation process between T-Mobile US and Sprint.

Although this is detail which some might not have expected, there are still quite a few questions remaining. That said, there is absolute clarity on one area in particular.

“We also took a $356 million impairment charge during the quarter, related primarily to our narrowband IoT build and our satellites D1 and T1,” said CFO Paul Orben. “Now that the T-Mobile/Sprint merger has closed and there is more clarity surrounding our revised build-out requirements. We no longer intend to finish our narrowband IoT build.”

NB-IOT has been struggling to live up to the expectation in numerous markets and this will not help matters. Dish is officially turning its back on NB-IOT, choosing to take an impairment charge on FCC commitments and turn attentions to a 5G network instead of completing the project.

While this might not be the most encouraging of signs, the embracement of OpenRAN and Mavenir as the company’s first official supplier is.

“Marc [Marc Rouanne – Chief Network Officer] continues to work on the architecture and further vendor selection,” said Ergen. “So I would anticipate more of those announcements in the third quarter. And then we’ll share our deployment plans once those are formalized likely on the next call.”

The dynamic of network suppliers is an interesting one for Dish. Ergen highlighted there was a desire to use Huawei equipment, which he described as “best in class”, though the team is being asked to find innovation in new ways. We also found out there is an active dialogue between Dish and Japan’s Rakuten to learn about OpenRAN deployments in the wild.

This is an area many will be keeping a close eye on, not only for validation of a technology which is still not the real deal, but also vendor appointments. The scale of this network, and the aggressive deployment schedule, could force OpenRAN start-ups to grow very quickly. Dish could be a major catalyst for growth for the lucky few who are selected.

It is of course early days, but there are some very interesting developments to keep an eye on here. The team might have opened the door slightly, but there is still much left to discover.

Will the team be able to deploy a network for $10 billion? How will it build its wholesale business unit? When will network slicing begun to be factored in? Which OpenRAN suppliers will be added to the roster over the next few months? Which markets will the postpaid products be launched in first?

With the next earnings call scheduled for July 30, the next three months could offer some very interesting announcements.


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