Dish crafts its plans to become the 4th US wireless carrier

T-Mobile’s CEO John Legere says Dish has the opportunity to become a 'disruptive' wireless carrier. (Getty Images)

There were times when this hardly seemed possible, but Dish Network is now poised to become the United States’ fourth wireless carrier, thanks to the likelihood that the Sprint/T-Mobile merger will happen.

The U.S. Department of Justice officially blessed the $26.5 billion merger of Sprint and T-Mobile today. The merger still faces opposition from a number of state attorneys general, and it must receive final approval from by regulators. But the deal’s prospect is looking much better, paving the way for Dish Network to set up shop as a fourth facilities-based national competitor.

RELATED: DoJ officially signs off on T-Mobile-Sprint merger

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Dish has committed to the Federal Communications Commission that it will have deployed a core network and offer 5G broadband service to at least 20% of the U.S. population by June 2022. And by June 2023, Dish’s 5G network must cover at least 70% of the U.S. population with download speeds of at least 35 Mbps. In regards to Dish's AWS-4, 700 MHz, and H Block licenses, if Dish hits a 50% coverage threshold by the 2023 deadline it will be granted an automatic two-year buildout extension. In addition, by 2023, it must have at least 15,000 5G sites deployed and at least 30 megahertz of Dish’s downlink 5G spectrum averaged over all its deployed 5G sites nationwide.

Notably, Dish agrees not to sell its AWS-4 or 600 MHz licenses for six years without prior FCC and DOJ consent, unless that sale is part of a larger sale of Dish itself. 

In order to begin the process of setting up its wireless network, following the completion of the merger of Sprint and T-Mobile, Dish will:

  • Acquire Sprint's prepaid businesses and customers, including Boost Mobile, Virgin Mobile and the Sprint-branded prepaid service.
  • Acquire 14 MHz of Sprint's nationwide 800 MHz spectrum.
  • Access the New T-Mobile network for seven years, including the ability to serve Dish customers seamlessly between T-Mobile's nationwide network and Dish's new independent 5G broadband network.

Dish's proposed asset acquisitions from Sprint are valued at about $5 billion, including a $1.4 billion purchase of Sprint's prepaid businesses, and a $3.6 billion agreement to purchase Sprint's nationwide 800 MHz wireless spectrum. The spectrum purchase is expected to be completed three years after the closing of the acquisition of the prepaid businesses.

RELATED: Expected $5B Dish deal paves way for T-Mobile, Sprint approval

Skeptics have questioned Dish’s ability to pay $5 billion and successfully create a new, viable wireless carrier.

Dish Co-Founder and Chairman Charlie Ergen said in a statement: "We've been here before. When we entered pay-TV with the launch of our first satellite in 1995, we faced entrenched cable monopolies, and our direct competitor was owned by one of the largest industrial corporations in the world. As a new entrant, Dish encountered many skeptics who questioned our ability to succeed. But customers loved the disruption we brought to the marketplace."

Indeed, Ergen seems to have a new (and unexpected) champion: T-Mobile’s CEO John Legere. On today’s Q2 2019 earnings call with investors, Legere said, “I’m not usually the one to be positive on others’ capabilities. It’s very clear that with the spectrum Dish has, with the acquisition of Boost, with the MVNO arrangements, with the transition services agreement while they build out their network, with the ability to get some of the decommissioned towers and stores, Dish has a real, significant opportunity to be a credible, disruptive fourth wireless carrier.”

Of course, it’s now in Legere’s own interest to advocate for Dish in order to get the T-Mobile, Sprint deal done. “I do see them [Dish] having all the tools in the tool kit, including the motivation as the company and Charlie himself to become a disruptive player,” Legere added.

There’s also the question of how does Dish quickly build a wireless company with an experienced wireless team? iGR analyst Iain Gillott said, “Verizon is going through these early retirements right now. There are plenty of people with 20-25 years in wireless on the street right now, and vendors who will help you as well.”

Specifics on Dish’s plan

Dish plans to close on its new wireless assets within three months following the completion of the Sprint and T-Mobile merger.

At close, Sprint's prepaid businesses and customers will immediately move to Dish, as will the more than 400 employees and nationwide independent retail network that supports more than 7,500 retail outlets.

Dish will activate all new wireless customers on the New T-Mobile network. Existing prepaid customers will be supported on the Sprint legacy network and will eventually transition to the New T-Mobile network.

As Dish deploys its own facilities-based network, Dish will still have access to the New T-Mobile network for seven years through an MVNO agreement, as well as an Infrastructure MNO arrangement that allows roaming in certain areas until Dish’s 5G network is built.

*FierceWireless associate editor Bevin Fletcher contributed to this report.
 

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