Dish Network’s 5G test network delayed; no firm date for commercial 5G service

We all know that Dish Network’s satellite TV business has been declining for years.  Their prepaid Boost Mobile MVNO business is also declining, but that isn’t very important either.

[Dish’s existing prepaid business is largely from the acquisition of the Boost business from T-Mobile, Dish lost 201,000 subscribers in the period, fewer than the -254,000 expected by analysts, but more than the -132,000 expected by New Street Research. Dish ended the quarter with 8.89 million retail wireless subs.]

What really matters is the 5G/O-RAN business they are building with help from Amazon’s AWS. We may not find out anything important about that business for months. See analyst comment at the end of this article.

Dish’s planned 5G test market in Las Vegas, NV will show us whether they can get the network to work. Will they be able to do it for less than the $10B CAPEX to which they have estimated?

That 5G test network is about a quarter behind schedule! The company now says it will run a beta trial for at least 90 days there before pushing ahead with a commercial launch in Las Vegas, possibly in early 2022.  However, the timing of commercial 5G is uncertain as per remarks by W. Erik Carlson, Dish President and Chief Executive Officer on their 2Q2021 earnings call:

“We have to see what — how our beta goes, right. So I’m going to beta test now, for service of a different sort then I think about nine months in the beta. So it depends on — we don’t think that’s where we are. But we have to get more data on the beta to know when we roll that. We want to roll — we get a first impression, and we want it to be a good first impression. Obviously we have — we do — and as soon as — everything we learn in Vegas goes directly into the other network, so we can line up it the same time. So the bottom line is that it’s going to be a minimum 90 days, and if we do our jobs correctly and our vendors do our jobs correctly, then we’re going to be ready for prime time at the first of the year.”

……………………………………………………………………………………..

Dish will have 5G construction activities in Las Vegas “substantially complete” within the next 60 days and prior to the end of Q3 2021, Dave Mayo, Dish’s EVP of network development, said Monday on Dish’s Q2 2021 earnings call.

“I think we’ll be in beta for a minimum of 90 days,” said Charlie Ergen, Dish’s chairman, noting that the initial network launch there will feature Dish’s 5G core network being placed in the cloud.

Most of the traffic for the trial will run on Dish’s 5G network. But Ergen noted that the added integration of AT&T’s network in the wake of the recently signed network deal between Dish and AT&T, alongside work already underway to tie into T-Mobile’s network, is one of the reasons for the anticipated 3 month duration of the Las Vegas 5G trial. However, he expects most of the 5G network usage in Las Vegas to run on Dish’s network with AT&T’s network in support.

[Dish’s new MNVO agreement with AT&T means that their focus for the next five years can be on the FCC’s buildout requirements – 70% of each AWS-3 license by June 2025 – and they no longer need to worry after that.]

Dish has yet to announce pricing and packaging for the Las Vegas beta trial and beyond. “We will have a retail presence and we will have offers for consumers that we think will be competitive,” said Ergen. Dish is already seeking testers through its “Project Gene5is” sign-up site.

Dish has commenced 5G network construction on close to 30 “geographies” within the four regions and 36 markets being targeted via the company’s decentralized approach, said Mayo. Much of that early market activity centers on where Dish is collocated with tower companies.

“In that regard we’ve signed substantially all of the leases that are required to meet our 20% mandate for next June and have received notices to proceed on close to one-third of the sites,” said Mayo, noting that, in some cases, there are multiple geographies within a market that are being targeted.

Dish has signed tower lease agreements with each of the big four cell tower companies. Dish Network’s SEC 10-Q report states their “other long-term obligations,” which represent “minimum payments related to tower obligations, certain 5G Network Deployment commitments and satellite-related and other obligations.”

The total tower obligation is up from $8.5B last quarter to $8.8B his quarter, with the largest increase (more than $400M) now called for over the balance of 2021.

Ergen also allowed that it’s “plausible” that Dish could work with enterprise customers to help finance some of the 5G buildout, particularly among those that would use slices of Dish’s 5G network to power private networks.

…………………………………………………………………………………

Stephen Bye, EVP and chief commercial officer for Dish’s wireless business, confirmed that the deal does enable AT&T to deploy Dish’s spectrum for all customers on its network.

“We’re seeing significant traction and interest today in private networks and private 5G networks, and the architecture we’re deploying really enables a level of control and a much deeper layer of security that allows the enterprise to utilize that network for their own business operations,” said Bye.

He added that Dish is responding to multiple requests from enterprises and currently working on proof of concepts. “We’re seeing interest across every vertical and every industrial segment and we’re very well positioned to take the architecture that we’re deploying, being cloud native, but also the open architecture and the ability to do (network) slicing, it is distinctively unique compared to what the operators have in the market today.”

…………………………………………………………………………………….

Dish has not announced a fixed wireless broadband for its upcoming 5G network, but Ergen said he wouldn’t rule it out amid ongoing government-backed subsidy efforts focused on unserved or underserved parts of the country.

“I think fixed wireless is a place where the wireless industry can go,” he said, citing Verizon’s and AT&T’s activity there. The amount of money being plowed into infrastructure is a “positive for all connectivity companies,” Ergen added.

……………………………………………………………………………………….

Analyst and colleague Craig Moffett was not able to value Dish Network as a company, because of so many unknowns about their 5G/O-RAN efforts.  He wrote in a note to clients:

There is little one can do here to arrive at an empirically justifiable valuation. Making estimates for subscribers, ARPU, and operating margins would be, at this point, absurd; we have no basis for estimating any of those. So what’s left is merely… sentiment.

Is building a 5G network going to be a good idea? Can it be done at a reasonable cost? If one believes the answer to these questions is “yes,” then one will be positively inclined towards Dish’s equity. If not, then, well, not. It is very unlikely that we will learn anything more anytime soon. (Edited by Alan J Weissberger)

…………………………………………………………………………………….

References:

https://ir.dish.com/news-releases/news-release-details/dish-network-reports-second-quarter-2021-financial-results

https://www.lightreading.com/5g/dish-slates-90-day-beta-as-las-vegas-5g-launch-gets-pushed-to-q4/d/d-id/771371?

https://www.fool.com/earnings/call-transcripts/2021/08/09/dish-network-corporation-dish-q2-2021-earnings-cal/

https://www.sdxcentral.com/articles/news/dish-pushes-5g-network-availability-to-early-2022/2021/08/

https://edge.media-server.com/mmc/p/nf5rkoha

AT&T to be the primary network services provider for DISH MVNO customers

Analysis of Dish Network – AWS partnership to build 5G Open RAN cloud native network

 

2 thoughts on “Dish Network’s 5G test network delayed; no firm date for commercial 5G service

  1. “We think the AT&T in-market roaming deal should allow for a more capital efficient build,” wrote the New Street team led by Jonathan Chaplin in a note to investors. While still waiting for more information about the agreement, the analysts believe the AT&T deal significantly improves economics for the Boost Mobile business, the cost of the 5G network and how fast it can be built.

    New Street said the company’s operating businesses (including pay TV) “are doing their job” by creating cash to fund the network build – generating $2.5 billion in cash over the last 12 months, according to the firm.

    In the second quarter Dish spent $201 million for its 5G network deployment and expects capital spending to increase substantially through the rest of 2021 as it ramps up the build-out phase.

    https://www.fiercewireless.com/operators/dish-pushes-back-launch-5g-beta-service-las-vegas-to-q4

  2. Dish’s commercial 5G service will likely be delayed again and again and again. There are just too many unknowns, too many moving parts. Specifically: integration of 5G RAN and AWS 5G core network, role of AT&Ts 5G network (which is 5G NSA now- 5G SA in future with MSFT Azure), totally unknown status of commercial Open RAN networks which have yet to demonstrate multi-vendor interoperability based on either O-RAN or TIP Open RAN specs.

    Also, it is not known if Dish’s 5G/O-RAN network can scale to accommodate many simultaneous users over a large geographical area.

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

*

 
 

 

Solve : *
15 ⁄ 3 =