Dish tie-up with Amazon could lift tower companies, Guggenheim says

IoT (Pixabay)
Amazon is reportedly in talks to be a customer of the IoT-centric network Dish hopes to build.

A rumored wireless tie-up between Dish Network and Amazon could be a boon for the tower industry, according to analysts at Guggenheim Equity Research.

TVNewsCheck was among the first to report earlier this week that the satellite TV provider and Amazon were in talks that would see the online retailer become “a foundational customer” of the network Dish has said it plans to build to serve the internet of things (IoT). The two companies have yet to comment on the report.

“While Amazon’s intent was not disclosed (it could be considering the use of a network for delivering its content or its planned drone delivery service), we believe the bigger takeaway is the positive read on the towers,” Guggenheim analysts wrote in a research note. “If Dish does plan to build a wireless network, the deployment of that infrastructure could be good for towers.”

Dish Network in March announced plans to build a narrowband IoT (NB-IoT) network to meet the FCC’s buildout requirements for its spectrum. 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. And 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 last month, far exceeding the expectations of most analysts. CEO Charlie Ergen said earlier this month 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. That may not provide much of an immediate lift to tower companies, Guggenheim said, but it could lay a foundation for future revenues.

“Because the network as initially proposed is expected to require only a limited amount of new equipment – we do not expect any meaningful near-term impact on towers,” the analysts wrote. “That being said, we also view this plan as the bare minimum Dish needs to do in order to maintain its licenses – and one which is unlikely to represent the ultimate use for the spectrum”