Dish Network on track for 5G build-out; Phase1 is NB-IoT

Despite skepticism from industry analysts and some recent prodding by the FCC, Dish Network Corp. is steadfastly confident that it can meet its service and buildout commitments for the wireless spectrum it owns.  On it’s second quarter earings call (see excerpts below), Dish stressed that it’s “on track” to complete the first phase of a 5G-capable network, initially supporting Narrow Band Internet of Things (NB-IoT) services, by March 2020.

Author’s Note: Of course, NB-IoT is a 3GPP spec and is not part of true standardized 5G (ITU-R IMT 2020).

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CEO Charlie Ergen on Dish’s 2Q-2018 earnings call earlier this week:

When we first started talking about it, I think there was a high degree of skepticism that an IoT network — that narrowband IoT network was the business. And of course since that time, you’ve seen Verizon, and AT&T, and T-Mobile now has a national plan all around the world Vodafone, companies in China very far ahead in IoT. So think it’s now recognized that narrowband IoT is in fact a major contributor in the world moving forward.

So we have a track record of being innovative, disruptive and it may be on the — maybe being on the very, very leading edge of where technologies go and we have another opportunity to do that in 5G…. I think that the FCC is maybe just like many people in this call and many investors and that there is some skepticism on DISH’s ability to execute that plan it’s a big project. And I think as the months go by, as people see the progress that we made, you turn that into people coming to the realization that we can in fact — we face same skepticism when we were going to launch satellites and compete against with — compete against incumbents and major corporations. And we never done that before, it was a big project for us. But with a dedicated team of people focused on the right direction we’re confident that we’ll be able to do that.

But the big paradigm shift in 5G, not the market in 5G that you’re going to hear about , but the real paradigm shift in 5G is Release 16 from 3GPP, which for standalone network is December of 2019, that’s when the specification comes out. It allows you to do three things that you can’t do in 5G today; it allows massive broadband; it allows massive IoT connectivity; and it allows the network to have low latency, so very, very low latencies.

Editor’s Note:  That is absolutely correct- it’s 3GPP release 16, along with parts of release 15, that will be submitted to ITU-R WP 5D for consideration as an IMt 2020 RIT.

We also are in a position with clean sheet of paper to do one — two more things really; one is to virtualize the network in a day and virtualize every aspect of our network, not just portions of it; and to slice our network so that it looks like separate networks to potential partners and customers. So it’s a huge, huge paradigm shift in terms of being 100% 5G with Release 19. So that release comes out at December 19, which means that people have to go build product for that. So product becomes available sometime later in 2020.

The second thing that happens is that our uplink spectrum. Let’s take 600 megahertz as an example that is not cleared by the broadcasters fully cleared until July of 2020. So we can’t build a modern network. The state-of-the-art we can’t start building that until 2020. And we’re hampered today just as a sideline, we’re very hampered today in building network because our uplink spectrum — we only have 5 megahertz of uplink spectrum. You can’t build a massive broadband network with 5 megahertz of uplink spectrum. So we have a lot of downlink spectrum, but we don’t have corresponding uplink. So we’ve got to get that cleared. And it’s not — it’s the 600 megahertz, it’s still the DE issues that are outstanding, all those things need to get cleared up for us to be able to do it. But everything comes together in 2020 for us to build a modern network.

The competitors will start building hybrid networks, but they’re not going to get to a full 5G platform without ripping out what they already have. And they have hundreds of millions of customers with phones. So the phone customer is not going to see that much difference in latency. So that some of the things that we’re going to do aren’t going to be that attractive from a cost to benefit ratio to the incumbents. But if we want to lead in 5G, we want to lead in artificial intelligence, virtual reality, autonomous vehicles,, smart cities, you’re going to need a more modern network for that and we’ll play big part in that.

Dish expects NB-IoT deployments to start “in earnest” this fall, Tom Cullen, Dish’s EVP of corporate development said. He pointed out that this part of the buildout is already funded by cash on the company’s balance sheet.

As I mentioned on the last call, we’ve made a lot of good progress and it’s the number one priority here at DISH and we’ve got a dedicated team working on it day-in and day-out. And we’ll start seeing radios in the next in the coming weeks and the deployment will start in earnest later this fall and that as we’ve mentioned before, it can be funded off of cash on the balance sheet.

On the number of NB-IoT cell sites/towers, Ergen said:

We’re not, at this point, disclosing the number of towers. As you know — as you’re doing RF planning and deployment that’s a pretty fluid environment and the number of towers is changing as we make progress going down the road. So I can’t address that specifically other than, as I said earlier, we feel like we’re making good progress and we’ll have pretty meaningful insight I think in the next four to six months.

I think you can assume that we would have materially less towers in phase one than phase two as you get into some of 5G applications that once the Release 19 is that you’ll need a denser network for sure. We have disclosed that we expect to spend between $500 and $1 billion on wireless through 2020. So they give you’re a range where we think it is no matter how many towers it is, we’re probably going to be in that range. And we’re working with a third party for RF design in terms of how many towers. And then obviously once we get it to test, we could verify that the specifications that the RF design and the vendors have said to us, is accurate. And so we’re — the answer is we don’t surely know, but we do know it’s materially less towers than perhaps the incumbents have today on a nationwide basis just because the range is clearly farther to the spec.

Cullen on 3GPP NB-IoT coverage:

 I would only say that the 3GPP standard spec) today is about 35 kilometer coverage. But the 3GPP is currently entertaining, changing the NB-IoT standard (spec) to 120 kilometers of coverage and some of the vendors we’re working with are able to provide 100 km. Now you can’t do that in every area, obviously, because of clutter and urban density and so forth. But that — because of that level of propagation, it reduces the number of towers necessary to provide the required terrestrial signal coverage as dictated by the license.

Ergen refuted persistent suggestions that Dish should just sell its spectrum, holding that Dish is committed to the network buildout because 5G is critical to the company’s future.

I don’t think you’ve heard me talking much about selling spectrum even, question number one. And then analysts have talked about that but I think that we see such an opportunity for 5G in terms of what that does realizes is our network is going to be different as a standalone network, it’s a little bit different. And we think the customer we might go after might be quite a bit different than the incumbents. And we see that as the long-term future of how this company is relevant 30 years from now. And so that’s a tough transition and tough on investors to be patient while it goes through that. But that has been our focus and has always been our focus.

We originally want to be built an LTE 4G network. We just — the rules on H-block got changed where we suddenly lost some of our — from interference perspective and we had to change course and then we had to go downlink this is all things that took place we had to wait for the next paradigm shift. And that’s — the good news is the 5G paradigm shift is much bigger than the LTE paradigm shift.

How much capital will be needed for the 5G build-out?  Here’s what Ergen said:

There is no question that we need to raise capital for the build-out. But realize we’re two-thirds of the way there — more than two-thirds of the way there in terms of capital for total 5G network. So run the math on that and it’s something like dollar megahertz per pop with a totally standalone 5G network, right. The number of people that might be attractive to is very long. What way you might structure partnerships and the ability for capital are many, many, many, many options to how you might do that.

There isn’t an industry in the next decade that doesn’t need what we’re going to build; and tens of billions of dollars is going to autonomous vehicles, but they’re going to need a piece of what we have; tens of billions of dollars goes to healthcare, they need a piece of what we have; tens of billions of dollars goes in utilities, they need a piece of what we have; tens of billions dollars is going into artificial intelligence, they need a piece of what we have; tens of billions of dollars are going in virtual reality, autoimmune reality and need a piece of what we have; tens of billions dollars is going into smart cities, they need a piece of what we have.

How long will NB-IoT build out take and what comes next?

It takes three years to build this first phase (NB-IoT). But the first phase leads to the second phase, which I think everybody is going to be pretty thrilled about, including the FCCs and investors and consumers. The first phase is going to be important but it’s not going to be as massive as we all would like. But for our license that’s not required and there is practical reasons why we can’t make it more massive today.

 

 

 

 

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