Charlie Ergen's Dish Network is betting big on wireless, having spent $2.775 billion to buy S-Band spectrum from DBSD North America and TerreStar Networks--and the wager may be all about delivering video content to Dish subscribers and beyond.
The company has been putting in place the infrastructure and commercial offerings to position itself as a more robust content provider. "I don't think we're just a satellite TV company anymore," CEO Joseph Clayton told Bloomberg Businessweek. "Given the assets we've been accumulating, I don't think it's hard to see we're moving in a different direction from simply pay-TV, which is a market that's becoming increasingly saturated."
Dish, citing the conditional waiver the FCC granted wholesale LTE provider LightSquared, wants to build out a hybrid network based on LTE-Advanced using the 40 MHz of spectrum from TerreStar and DBSD under a subsidiary called Gamma. Dish argued in an August filing with the FCC that the network will help promote the FCC's goal of expanding broadband access. In its filing to request the transfer of the spectrum licenses, Dish said that the FCC should waive its Ancillary Terrestrial Component (ATC) "integrated service" rule, and permit Dish provide dual-mode devices to customers who want them, and single-mode terrestrial devices to customers who do not want the satellite function.
Clayton repeated claims he has made before and said Dish might want to partner with or buy a wireless carrier to improve its ability to offer wireless service. Analysts have cited flat-rate wireless players MetroPCS (NASDAQ:PCS) or Leap Wireless (NASDAQ:LEAP) as potential partners.
It's clear though that Dish wants to get more heavily involved in the streaming video market. In September Dish began offering a Blockbuster-branded movie-streaming service to its 14 million subscribers (Dish acquired Blockbuster in a bankruptcy auction earlier this year). Clayton said the service will soon be available to non-Dish customers, according to Businessweek. The market for wireless video is growing and fully two-thirds of all mobile data traffic will be video by 2015, according to a forecast released in February by Cisco Systems.
Dish's Blockbuster Movie Pass service gives users satellite-TV, thousands of Blockbuster on-demand movies, access to video game and DVD rentals, and streaming online content for $39.99 a month for the first year. More importantly though, Dish customers can also share the content among multiple mobile devices using Sling Media technology, which Ergen bought in 2007. Dish also reportedly made a $1.9 billion offer for online video provider Hulu, but last week Hulu's owners decided to end an auction of the service and focus on how to position it for the future.
- see this Bloomberg Businessweek article
- see this WSJ article (sub. req.)
- see this Bloomberg article
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