Dish execs confident on ability to offer disruptive wireless pricing

Dish executives said the company will be able to offer disruptive wireless pricing from day one. (Getty Images)

Dish Network executives on Monday pushed aside criticism over the satellite operator’s credibility to build and operate a 5G network as a fourth national wireless competitor, and indicated the company can offer disruptive pricing right out of the gate.

Dish is planning its push into the wireless market with new spectrum and prepaid assets that are being divested by T-Mobile and Sprint as part of concessions required by the U.S. Department of Justice to preserve industry competition in the wake of pair’s $26.5 billion tie-up.

“They’ve [the DoJ] structured this agreement so that we feel very good about our ability to compete as a fourth entrant to this marketplace, both in the short term, particularly, and obviously in the long-term,” said Dish Chairman Charlie Ergen on the company’s second-quarter earnings call Monday.

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Along with its $5 billion agreement for assets, Dish also struck an MVNO deal with T-Mobile. On the call, executives indicated that while there will be upfront costs related to its 5G core network build, Dish will be able to deliver competitive pricing even before its own infrastructure is fully built out. 

“As far as wireless pricing, yes, we do think we’d be disruptive, day one,” added Dish EVP of Corporate Development Tom Cullen. “Not only because of attractive rates, but also bundling capabilities that are addressed in the deal.”

The deal between T-Mobile and Sprint is not done yet though, and some have raised skepticism that Dish can viably put competition concerns to rest. Importantly, critics include a group of state attorneys general who sued to block Sprint and T-Mobile’s merger earlier this year and reiterated opposition Friday after the DoJ announcement came.

Among the coalition’s concerns related to Dish, the group noted: “DISH has never shown any inclination or ability to build a nationwide mobile network on its own and has repeatedly broken assurances to the Federal Communications Commission about deployment of its spectrum.”

The state AGs added that Dish does not currently have an independent network to operate and will remain reliant on T-Mobile’s for “the foreseeable future” via the seven-year MVNO agreement that enables access to T-Mobile’s network.

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Dish previously sat on billions of dollars worth of spectrum licenses, and only in the last couple of years started unveiling plans for a narrowband IoT (NB-IoT) and 5G network build to meet FCC deadlines or risk losing its licenses. Dish committed to extended FCC timelines as part of its Sprint/T-Mobile deal, promising to cover 70% of the population with a 5G network by June 2023.

Ergen noted the company already released an RFI and RFP on Monday for the 5G network build.

Cullen said the states still need to objectively analyze and evaluate the remedy that involves Dish, but stressed that the deal’s structure allows Dish “to effectively compete on both price and packaging” from the get-go.

Dish plans to pay $1.4 billion for Sprint’s prepaid assets, including Boost Mobile, which brings with it about 9 million subscribers.

Ergen said in addition to expanding Boost’s distribution footprint, Dish can also tap into the satellite provider’s existing distribution and retail presence throughout the country to reach new geographies.

The company plans to build its network core by the end of 2020 and launch the network in its first cities “pretty quickly,” Ergen said.

Dish previously put a $10 billion price tag on the cost to build a 5G network, and Ergen said that figure has not changed. The company plans to balance that $10 billion between growing the Boost Mobile business and constructing a 5G network, initially building out in urban areas and later expanding to more rural markets.

Ergen acknowledged its NB-IoT network, which Dish started building last year and planned to spend up to $1 billion on, wasn’t one “to be proud of.” Still, it provided Dish with experience about wireless network permitting, site construction, and provisioning.

Dish is halting work on the NB-IoT network, and will redeploy those resources for its 5G standalone (SA) mode network plans.

“It’s a very cloud-centric approach, it embraces the mentality of virtualization from the ground up,” said Ergen of the network. 

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