Dish’s Ergen hints at cable interest in its planned 5G network

Dish Network
Dish Network is headquartered in Colorado. (Dish Network)

Dish Network’s Charlie Ergen suggested that cable companies could be interested in purchasing bandwidth on the company’s planned neutral-host 5G wireless network.

"If you look at the list of people that are interested in what we're doing, is cable—as a gross generalization—there? Yes, they are,” Ergen said during Dish’s quarterly conference call with analysts.

Ergen explained that Dish is planning to build a state-of-the-art 5G wireless network that isn’t encumbered with legacy technologies like LTE, as well as one that sports flexibility enabled by virtualization and software. Ergen boasted that Dish’s 5G network would “digitize the physical world.”

"Would cable companies want to start with the old technology, or would they want to move to the new, so they can leapfrog what the incumbents do? If I was the CEO of a cable company, I would want to leapfrog,” Ergen said. “Because our network is fundamentally a neutral host, it means that any of the people we talked about could be part of our network."

Ergen described Dish’s planned 5G network as a “wireless AWS,” meaning that capacity and services could be scaled up and down based on customer demand, much like Amazon’s AWS cloud services do today.

“There’s a lot of interest in what we’re doing,” Ergen said.

It's no surprise that Dish's Ergen may be looking at a partnership with a cable company. After all, Comcast, Charter and Altice have all signaled their interest in getting into the wireless business via MVNO relationships with operators like Verizon and Sprint.

Further, Altice's CEO this week hinted that the company may be on the hunt for unused spectrum. "There are people out there with lower spectrum that is unused in our region," Altice's Dexter Goei said during this company's quarterly conference call with investors, according to a Seeking Alpha transcript of the event. "And we'd love to work if we can, if we thought it made sense to build a network, we'd love to work with those guys and potentially license on that spectrum off of them."

Dish executives said that the company has already signed agreements with all of the nation’s major tower companies to build a nationwide NB-IoT network for internet-of-things services. Indeed, Dish announced this week that Ericsson will provide much of the equipment for that effort, which is scheduled to be finished by March 2020 and to cost up to $1 billion. The second phase of Dish’s wireless efforts involves building a full-blown 5G network using the 3GPP’s forthcoming Release 16 standard, an effort that Ergen has said could cost up to $10 billion.

Ergen declined to say when Dish might finish its 5G build-out but noted that money for the effort “could come in many shapes and forms.”

"When you have a really good business plan, you can find partnerships and/or capital to make those things happen,” he said.

Interestingly, Ergen also addressed criticism against Dish leveled by T-Mobile, which urged the FCC to strip Dish of its spectrum licenses because, T-Mobile argued, the company is hoarding its spectrum. “When we build a network that's 10 times more efficient than the current networks, that means we're going to use spectrum more efficiently. That's the opposite of hoarding. That's using spectrum more efficiently,” Ergen said.

Indeed, Ergen argued that T-Mobile itself would be hoarding spectrum if it is successful in acquiring Sprint and then decommissions Sprint’s network. T-Mobile has pledged that, if it acquires Sprint, it will migrate Sprint’s customers onto a network built across the spectrum holdings of both companies.

Finally, Ergen addressed Dish’s various proceedings at the FCC, noting that the company is waiting for the agency to make a decision about the AWS-3 spectrum licenses the company is hoping to gain access to through its “designated entity” bidding partners. Those licenses have been tied up in a lengthy legal dispute over whether Dish’s bidding partners should be able to obtain billions of dollars in discounts intended for small businesses. “It would be helpful to get a decision, whatever that decision might be,” Ergen said, adding that “It feels like we’re in the doghouse. … We’d like to do whatever it takes to get out of the doghouse.”

Ergen also addressed an FCC inquiry into Dish’s spectrum-build-out efforts, noting that the action won’t have an impact on Dish’s work in the space. “We’re past the point of no return,” Ergen said of Dish’s wireless efforts. “There’s not an opportunity for us to change it.”

At least some analysts don't expect the FCC to take action against Dish. "We continue to believe that the FCC doesn’t have grounds to disqualify the narrowband network for the purposes of meeting buildout requirements," the analysts at New Street Research wrote in a report on Dish's earnings. "Despite continued near-term headwinds (today’s sub miss won’t help), we still think DISH has an ample runway to monetize its spectrum."

In its quarterly earnings, Dish also reported losses in its video business. Click here for that story.