It’s quite possible that Dish Network could strike a network service agreement with a rural or regional U.S. operator, along the same lines as it did with AT&T. Granted, the deal with AT&T is on a bigger scale, but the same principles apply.
In fact, Dish Chief Commercial Officer Stephen Bye said during the company’s second-quarter earnings call on Monday that they’ve talked with a number of regional and rural operators about doing partnerships. One of the things they’ve discussed is “how do you do it in a capital-efficient way” where both parties benefit, he said. “We’ve had a number of those conversations.”
Despite their very public battles, Dish Chairman Charlie Ergen made it clear during the call that T-Mobile remains “super important” to Dish as it will continue to use T-Mobile’s network to serve customers. But one could imagine Dish teaming up with other operators in rural America. “Now AT&T, as much as geographies as they cover, which is a lot, they still don’t cover … there are still rural carriers, including UScellular, that cover areas that AT&T does not or T-Mobile does not,” Ergen said.
During the call, Ergen clarified that the AT&T agreement does not help Dish in terms of T-Mobile’s plans to shut off the CDMA network in January 2022. The AT&T deal also doesn’t help in terms of meeting the government-mandated buildout requirements. Dish needs to meet a 20% population mandate by June 2022 and a 70% population mandate by June 2023.
The 10-year agreement with AT&T includes in-market and out-of-market roaming and it helps support Dish’s buildout, but doesn’t remove its obligations on the build, according to Bye.
“One of the things that’s very important in this relationship is the quality of the AT&T network as it relates to supporting our customers, and particularly our Dish customers” that tend to skew more rural, Bye said. “It allows us to go beyond our existing footprint that we serve with Boost today,” to broaden distribution and address a different part of the market.
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Asked about how quickly Dish will be able to move the traffic from the T-Mobile network onto the AT&T network, Ergen said AT&T will be the primary partner from an MVNO perspective going forward, but that doesn’t mean it’s transitioning all of its customers off the T-Mobile network. “They remain an important part of what we’re doing to the extent they want to be an important part of what we’re doing,” he said.
Some customers will want to move to AT&T because of its network. For others, the T-Mobile network will be better and they’ll want to stay there. For many people, the speeds from 4G/LTE will be enough, but for those who want 5G, T-Mobile arguably has the perception advantage as the leader in 5G, Ergen noted.
In terms of spectrum and AT&T, both Dish and AT&T have mirror images of 700 MHz, and “there might be some interesting things you could do there,” to get scale and save costs if the companies are so inclined, according to Ergen. They share an interest in the 12 GHz spectrum.
Dish also has some unspecified spectrum that will lay fallow for a bit until it builds it out, and “it probably could be put to use” sooner rather than later by AT&T, he said. Dish is also buying other services from AT&T, like backhaul, that it has to buy from someone and since AT&T is a partner now, “they get the benefit of the doubt” on deals like that.
Both are in the video business. “You can see this potentially could be a much better deal than the $5 billion that we’re committed to,” he said. “It may not. The companies may not get along,” but, he suggested, both parties realize there are things that can be shared that are beneficial to both companies. “I’m sure we’ll remain frenemies. We obviously compete with each other as well.”
Regarding its 5G buildout, Dish has implemented a decentralized approach, where it has four regions and 36 markets. The early markets are substantially all co-locations, which explains a lot of the activity cited during recent tower company earnings calls. Dish has signed substantially all the leases required to meet its 20% mandate for next June. It also has received notices to proceed on close to one-third of the sites, according to Dave Mayo, EVP of Network Development.
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It’s started construction in close to 30 markets (which correlates with a lot of the LinkedIn notices that have been appearing), and there may be multiple geographies within a market, Mayo said. In Las Vegas, it expects to be largely done with construction activities in the next 60 days and will be beta testing in the fourth quarter.