A Dish Network (NASDAQ: DISH) executive said the company will begin a trial of fixed wireless broadband service with Sprint (NYSE: S) within a month. Dish launched a similar pilot with Sprint wholesale partner nTelos Wireless in Virginia during June and expanded the service availability in July.
Tom Cullen, Dish's executive vice president of corporate development, said during the company's second-quarter 2014 earnings call with analysts that the start of the fixed broadband trials has hinged on availability of TD-LTE Band 41 radios that can access Sprint's 2.5 GHz spectrum.
Cullen shared no other information regarding the upcoming trial with Sprint. However, when Dish and Sprint first announced their trial plans during December 2013, they said the deployment would initially be restricted to limited areas in Corpus Christi, Texas.
Dish's trial with nTelos is focused on central and western Virginia and currently includes parts of Charlottesville, Waynesboro, Staunton, Harrisonburg and Roanoke. Dish-nTelos Wireless high-speed Internet is available for $29.99 per month when bundled with a qualifying package of Dish's satellite TV service.
Ericsson (NASDAQ: ERIC) and Alcatel-Lucent (NYSE: ALU) provided infrastructure equipment for that trial. Customers must deploy a BandRich ruggedized outdoor router with built-in high-gain antennas to receive the 2.5 GHz LTE signal from nTelos' network sites. Customers are told to expect download speeds of up to 10 Mbps.
Cullen said the point of the broadband trials is to test the business model and assess how many customers the spectrum can adequately support. "Will the model work at 20 MHz, or does it require 40, or does it require 60?" he said, according to a Seeking Alpha transcript of the call.
Cullen said the assumption is that there would be more available spectrum in rural areas, and that excess capacity can be dedicated to fixed broadband. "We think with outdoor antennas on the rooftop, you're going to get better cell radius, the ability to provide more customer coverage off of a single tower, and those are the things that we hope to learn and better define in terms of consumer consumption patterns over the next three to six months," he noted.
Charlie Ergen, Dish cofounder and chairman, said Sprint's 2.5 GHz spectrum is "tailor-made" for delivering wireless fixed broadband service to the home, particularly in the case of low data users who are not streaming a lot of video. "I think that Sprint's got a real key asset there," he added.
An analyst on the earnings call asked Ergen if it might make more sense for Dish to make an offer to buy T-Mobile US (NYSE:TMUS) rather than just partner with Sprint, given that T-Mobile is ostensibly back on the market after Sprint gave up on plans to buy the rival operator.
"Don't know," said Ergen, who went on to extol Sprint's virtues, including its entrepreneurial attitude and competitive new CEO (Brightstar founder Marcelo Claure). "I'd almost say you ain't seen nothing yet, right?" he added.
Ergen expressed admiration for T-Mobile CEO John Legere, but said Sprint is capable of much more given its strong spectrum position.
Satellite TV operator Dish controls a 56 MHz swath of terrestrial spectrum, including 40 MHz in the AWS-4 band and 10 MHz in the 1900 MHz PCS H Block. Industry analyst Craig Moffett of MoffettNathanson Research said in an investor note that a network-sharing deal with Sprint and T-Mobile or an outright acquisition of T-Mobile by Dish now looks more likely than a sale of Dish's spectrum to a carrier, such as Verizon Wireless (NYSE: VZ).
- see this Seeking Alpha transcript
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