Dish's Ergen: We have a deal with Qualcomm, working on others
Dish Network Chairman Charles Ergen said that his company has inked a deal with Qualcomm (NASDAQ:QCOM) for chipsets to support devices running on its LTE Advanced network, and that Dish is in the hunt for more partnerships.
In a rare interview with the Wall Street Journal, Ergen said that Dish is also speaking with handset makers and backhaul providers to support Dish's putative wireless network, reiterating comments the company had made in the past to the FCC. Ergen said that "obvious" carrier partners include Sprint Nextel (NYSE:S) and T-Mobile USA, which might be able to tap into Dish's 2 GHz MSS spectrum.
Sprint did not comment on Dish specifically but said it is "open to opportunities with spectrum holders who can't or don't want to build a network for their spectrum," and T-Mobile declined to comment, according to the Journal.
Ergen seems to be fairly sanguine about Dish's wireless ambitions, despite uncertainty over whether the FCC will grant Dish a waiver that would allow it to sell terrestrial-only devices, which Dish has argued is essential to its business plan. Ergen said he thinks there's an 80 percent chance Dish will get the waiver (the FCC's proceeding on MSS spectrum rules is still open). However, he said Dish will not overreach with its plans.
"We're not going to do something that we can't achieve," he said. "It goes back to playing blackjack: If we have a 51 percent chance of doing it, then we are going to move ahead. If we have a 49 percent chance of being successful, we're not."
Ergen also dismissed the idea that the company will flip its 40 MHz of S-Band spectrum to another carrier for a profit, though analysts at Sanford C. Bernstein estimate the spectrum, if sold, could be worth about $8 billion, or 67 percent of Dish's current $12 billion market value.
Dish said in a filing to the FCC last month that it will not be able to launch its proposed LTE Advanced network using its spectrum until 2016 or later. This is about 12 months longer than the FCC's current proposed buildout schedule, which requires Dish to launch its network in three years covering 30 percent of the U.S. population. However, Dish has indicated that when it does launch its network, it will cover 60 percent of the U.S. population.
In a recent filing to the FCC, Dish provided details of its deployment plans. The company said that it will take at least 48 months from the time the 3rd Generation Partnership Project finalizes the S-Band specifications for LTE Advanced for Dish to launch its network. The 3GPP is not expected to finalize those specs until December, which means that Dish will not launch its network until at least December 2016 or later.
Dish, which paid $2.78 billion in 2011 for the airwaves in bankruptcy proceedings, argued that the FCC's buildout requirements are not feasible and are not in line with similar requirements for terrestrial services. For example, Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) have 10 years to cover 75 percent of the population using the 700 MHz spectrum licenses they won at auction.
- see this WSJ article (sub. req.)
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