Dish Network has pushed the expected launch of its initial 5G service in Las Vegas back slightly to the fourth quarter.
The operator is working to build a new 5G network in the U.S., using a cloud-native open radio access network (open RAN) architecture, and previously said beta service would go live in the third quarter. Dish now expects most of the construction to be completed in that first major market of Las Vegas by the end of September, according to a 10-Q filed Monday, which stated the new Q4 timeline.
Dish reported second-quarter results Monday, with a conference call scheduled for this afternoon.
Working to meet regulatory buildout requirements, 5G construction has started in multiple markets, including Las Vegas, Orlando, Washington D.C., and others.
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While the 5G network is still in progress, Dish is already operating a retail wireless business with almost 9 million subscribers through its acquisition of prepaid carrier Boost Mobile. That deal and new 5G build commitments (including covering 70% of the U.S. population by mid-2023) were made as part of approval of the T-Mobile and Sprint merger. The aim is for Dish to enter the wireless space as fourth nationwide facilities-based carrier, as a remedy to antitrust competition concerns of the Sprint and T-Mobile tie-up.
New Street Research analysts suggested the later timeline for Las Vegas launch could be to accommodate recent 10-year MVNO deal signed with AT&T as primary network services partner to host Dish retail subscriber traffic, including Boost Mobile. Dish and T-Mobile already had a network service agreement in place to let subscribers ride on the T-Mobile network while the Dish 5G network build continued, but relations between the two operators recently soured – particularly around T-Mobile’s coming shutdown of the legacy Sprint CDMA network.
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Dish still expects to spend $10 billion in capex on its 5G build, which some investment analysts have long-pegged as too low and which New Street analysts on Monday wrote they were surprised by.
“We think the AT&T in-market roaming deal should allow for a more capital efficient build,” wrote the New Street team led by Jonathan Chaplin in a note to investors. While still waiting for more information about the agreement, the analysts believe the AT&T deal significantly improves economics for the Boost Mobile business, the cost of the 5G network and how fast it can be built.
For its existing wireless business, Dish lost 201,000 net subscribers in Q2, according to the 10-Q, which cited operational changes, competitive pressures, ongoing optimizations to the existing business and wireless device shortages.
Still Dish lost fewer subs than Wall Street analysts’ expectations of almost 300,000, according to New Street. At the end of June, Dish’s had 8.895 wireless million subscribers.
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New Street said the company’s operating businesses (including pay TV) “are doing their job” by creating cash to fund the network build – generating $2.5 billion in cash over the last 12 months, according to the firm.
In the second quarter Dish spent $201 million for its 5G network deployment and expects capital spending to increase substantially through the rest of 2021 as it ramps up the build-out phase.
Dish already has a bevy of vendors lined up (including using AWS to host its RAN and mobile core elements) and signed multiple deals for infrastructure and tower sites. SBA Communications is one of the tower companies that reported seeing a step-change in activity levels from Dish during the second quarter.
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In Q2 Dish reported wireless revenue of $1.24 billion, including service revenue of $1.05 billion. Wireless churn was 4.32% and average revenue per user (ARPU) was $39.10.
New Street thinks that if Dish is successful with 5G plans, it could be worth $100 billion over time and “disrupt the wireless industry as we know it.” The analysts noted the launch in Las Vegas will be the first major test to its thesis, though “most of the value Dish will create in wireless is still years off, meaning investors will have to be patient.”