With just about five weeks to go, Dish Network might be looking to extend its deadline for covering 20% of the U.S. population with 5G. After all, it's also been dealing with the effects of Covid the past two years.
But Chairman and co-founder Charlie Ergen said there are no plans to do that. “We’re just going to get it done,” he said.
“We don’t think we need to ask for an extension at this point,” Ergen said in answer to an analyst’s question during the company’s earning call on Friday. “We want to keep our nose to the grindstone and do what we said we’re going to do.”
Ergen said Dish was fortunate in that it ordered radios before the full impact of supply chain constraints hit. Backhaul and power are different, but still not enough of a challenge apparently to lead to an extension.
“We have a can-do attitude. This is a great project. We’ve been through it before. This isn’t our first rodeo,” Ergen said, noting that analysts and others have been frustrated because Dish company executives aren’t going to trade shows or conventions to talk about what they’re doing. But every minute they’re not out there doing that gives them more time to meet their buildout deadlines.
That said, Dish will share more at its analyst day in Las Vegas on Tuesday.
As part of the government’s approval of the T-Mobile merger with Sprint, Dish was set up to become a fourth facilities-based carrier in the U.S. It acquired the Boost Mobile prepaid business from Sprint; separately, it also acquired Ting and Republic Wireless customers.
While it builds a new 5G network, it’s operating a retail business under MVNO agreements with T-Mobile and AT&T. That’s where it reported losing about 343,000 subscribers in the first quarter of this year – more than the 161,000 that it lost in the year-ago quarter.
The company ended the quarter with 8.20 million retail wireless subscribers. ARPU was $37.72; churn was 5.11%.
Dish cited competition and the transition from customers off CDMA as part of the problem. Ideally, the customers on CDMA, which is being shut down by T-Mobile, would go right onto Dish’s new network, but it’s not ready yet, so it’s dealing with an in-between stage where they need to be served through MVNO deals. Dish blamed part of that on T-Mobile shutting off the CDMA network sooner than Dish had expected.
Waiting on the DoJ
In a 10-Q filing, Dish explained that T-Mobile and Dish earlier this year reached a proposed settlement and amendment to their network services agreement, which, among other things, settled all open disputes, including CDMA matters, and “contained favorable terms to us.” But before Dish and T-Mobile could enter into this proposed settlement and amendment, they were required to obtain the approval of the DoJ, and they’re still waiting for that.
Ergen said they expect the DoJ has some changes in mind when it comes to the amendment or it would have been approved by now. The DoJ has been reviewing the amendment since February 22, 2022, and the delay is exacerbating problems for Dish.
“I know that Justice has a lot of things on their plate and maybe this isn’t the most important thing that they’re looking at but for us, obviously, it’s a very important thing,” Ergen said.
About that 20% commitment…
Dish needs to offer data to 20% of the population of the U.S. by June 14, according to Ergen.
He said what it offers out of the gate isn’t going to be as robust as they’d like for several reasons: The U.S. Department of Justice still needs to approve changes to its agreement with T-Mobile and it has some roaming arrangements that are in that amended agreement that are waiting for the DoJ’s approval. In addition, it doesn’t have Band 70 supported in its phones yet and “we have high priced phones,” Ergen said.
The Las Vegas launch, called Project Genesis, happened on Wednesday and includes an offer of $30 and one handset.
For context, Wave7 Research principal Jeff Moore called Dish’s launch in Las Vegas this week a “clown show” for several reasons. “It’s nine months late,” he told Fierce on Thursday. For another, there’s only one phone available – a Motorola model for $900 – and there are no retail stores.
Dish executives on Friday described the Las Vegas launch as early learnings but also stopped short of revealing too much about their retail strategy to rivals.
Ergen said the main thing is to get the network up and operating, start “putting water through the pipes” and see how it’s all working. “We haven’t done this before. It’s new to our company, although most of our team has done it before. Ultimately, our ability to compete is going to be the quality of the network,” he said, adding that it’s not just the quality of the network but the architecture that’s materially different than other companies’ legacy networks that are operating today.
Dish is building it on open Radio Access Network (RAN), cloud native and virtualization principles.
“It’s a modern network in a modern world, and we still have a lot of legacy in current networks. I’m very impressed with how well they work. Incumbents are to be commended for how well they work,” he said, but they’re complicated, expensive and sluggish in terms of change. “We’re going to be different.”
12 GHz for fixed wireless access?
Dish noted in its 10-Q filing that it’s directly invested about $20 billion in wireless spectrum licenses and made over $10 billion in non-controlling investments in certain entities, for a total of about $30 billion. Besides reaching 20% of the U.S. population by June 2022, it must reach 70% of the population by June 2023.
Asked about using its spectrum for the fixed wireless access (FWA), Ergen said they’re watching closely what T-Mobile and Verizon are doing.
Before the FCC is Dish’s request to use the 12 GHz band for 5G, and which “we think is an ideal frequency for that” and it could serve millions of customers with fixed wireless, particularly in rural America. “We’re hopeful the FCC will make some rulings on that,” he said.