Dish Network and Amazon are reportedly in talks about joining forces to enter the wireless fray.
The Wall Street Journal reported this morning that the satellite TV company and the massive online retailer are considering multiple arrangements as a way to take on both incumbent service providers and cable companies that have begun to dip their toes in the wireless waters. Amazon might help Dish build the IoT-centric network it is known to be considering, or Dish could offer mobile services to Amazon Prime members for an additional monthly fee.
The Journal report cited unnamed “people familiar with the matter,” but said no deal is imminent.
Rumors of potential tie-ups between wireless carriers, cable companies and other would-be newcomers to the space have grown deafening in recent months. Reports surfaced in May that Dish and Amazon were in talks that would see the retailer become “a foundational customer” of the network Dish has said it plans to build to serve the IoT, although neither company has commented on the matter.
Dish Network owns a significant chunk of unused spectrum, and in March the company announced plans to build a narrowband IoT (NB-IoT) network to meet the FCC’s buildout requirements. The clock is ticking for Dish to put its airwaves to use one way or another: FCC rules stipulate that the satellite-TV provider must achieve 40% signal coverage on the 700 MHz E-Block licenses it purchased in 2008 by the end of the month, or reach a 70% buildout by March 2020. Dish faces similar mandates for its licenses in the AWS-4 band.
Dish spent $6.2 billion to buy licenses during the auction of 600 MHz that wrapped up in April, far exceeding the expectations of most analysts. CEO Charlie Ergen said several weeks ago that the company was focused on buying licenses in urban areas, placing a high priority on the potential number of connected devices rather than people as part of its IoT-centric strategy.
Some analysts remain unconvinced that Dish truly wants to build a network from the ground up and is biding its time as it considers other ways to monetize its spectrum. But building an IoT network may enable Dish to meet the FCC’s build-out mandates with minimal costs—particularly if it can strike a deal with a deep-pocketed partner.
The Journal reported this morning that Dish CEO Charlie Ergen and Amazon CEO “have been crossing paths more often” over the past year, perhaps leading to the discussions.
Of course, Amazon isn’t Dish’s only potential dance partner as the satellite TV provider plots its entry to the wireless market. T-Mobile was viewed as Dish’s most likely M&A candidate two years ago, and multiple analysts said in February that Verizon had emerged as Dish’s best option. Cable companies Comcast and Charter also may be potential partners for Dish.