Just after Dish Network’s CFO said it expects cap ex to increase substantially in 2021 as it ramps up its 5G network deployment – it invested over $50 million in op ex and cap ex during the fourth quarter – Dish Chairman Charlie Ergen spoke about 2020 as a year of transition.
In fact, it’s the third time Dish has marked a transition in Ergen’s 40 years in business. “I have always felt that the transition year – the transition time is always the toughest,” he said during the company’s conference call to discuss fourth-quarter results on Monday. “And if you can get through the transition, then you can really jumpstart, you can really grow your business in a dramatic way.”
When Dish started in the satellite TV business in 1980, the transition was really about survival, he said. It took about three years to make the transition from a retail company to a distribution company and get past the survival stage. The second transition took over a decade, and that’s when the company moved from big satellite dish technology to small dishes.
Fast-forward to 2020, and it was over a decade-long transition that consisted of accumulating spectrum – Dish has long been considered a spectrum hoarder in wireless industry circles. But now it has a chance to deploy that spectrum for 5G. Ergen described 2020 as a successful transition year for Dish, which continues to lose paid TV subscribers.
Last year, Dish finalized its long-term wireless executive team, which took years to do, and it entered the wireless retail market in an unexpected way with the acquisition of Boost Mobile and a 7-year MVNO agreement with T-Mobile. It purchased 14 megahertz of 800 MHz spectrum and about 20 megahertz of CBRS spectrum nationwide, as well as around 60 megahertz of millimeter wave spectrum – all last year. It also solidified a lot of vendor agreements.
Now, the wireless industry’s brightest engineers are looking to work for Dish, because “we’re building something special,” he said. The number of resumes and the quality of people who are applying to work with Dish is exponentially higher than it was last year, he noted.
Dish has more than $4 billion of cash on its balance sheet. “We have everything that we need to build this one-of-a-kind 5G network,” he said. Now it’s about execution. Sure, there are significant risks in deploying the network and making it all work. There will be a lot of problems along the way.
However, “our company has always been a company that can execute. So I have a high degree of confidence that we’re going to execute in 2021,” Ergen said.
That means building its first major city by the end of the third quarter, which he referred to as a “beta test” for lack of a better word. But they need to do a lot in a relatively short time – one where a pandemic, for the time being, dictates most everything.
He did not say where Dish’s first 5G service will be launched, but it will be an NFL city. There will be other cities as well, but it’s not saying how many by the end of this year. They’re focused on a June 2022 metric of 20% of the U.S. population served in order to meet its first FCC milestone. By June 2023, Dish needs to cover 70% of the U.S. population.
Dish is unique in that it’s building a 5G open Radio Access Network (RAN) cloud-native network in the U.S. from scratch. Ergen noted that Jio in India took a first step and Rakuten in Japan took a second step, but “we are going to be the first network that does it and completely.”
It’s now moving into the second phase of its open RAN journey. “We have tested a lot of vendors. We have brought radios, compute software together and now what we are doing is that we are transferring this knowledge to our teams in the field in order to build it across the U.S.,” said Marc Rouanne, EVP and chief network officer of Dish’s wireless business.
In terms of testing integration with various vendors, Rouanne described it as a normal journey, similar to what he’s seen in the past for other wireless technologies. “This is – we are coming at a time when there is maturity in the O-RAN industry for us,” he said. “So we are just deploying it now.”