During the company’s second-quarter earnings call today, Dish Network Corp. co-founder and Chairman Charlie Ergen that the company is “now in alignment” with where the FCC, the administration, and many members of Congress “want us to go” with respect to its wireless network buildout.
As part of its agreement to acquire divested assets related to Department of Justice approval of T-Mobile US, Inc.’s acquisition of Sprint Corp., Dish has “voluntarily changed flexible use license[s] for mobile license[s],” Mr. Ergen said. Dish is seeking extended build-out deadlines to deploy a nationwide 5G network but, in exchange, has agreed to be bound by restrictions and voluntary contributions to the U.S. Treasury of up to $2.2 billion if it misses milestones (TR Daily, July 26). “Spectrum is lying fallow until this can be resolved, and right now it’s in the FCC’s court,” he added.
The Justice Department’s proposed consent decree for the approval of the T-Mobile–Sprint transaction calls for the divestiture of Sprint’s prepaid business, including Boost Mobile, which has 9.3 million subscribers, Virgin Mobile, and Sprint prepaid, to Dish for about $1.4 billion (TR Daily, July 26), which Mr. Ergen said today will include the transfer of just over 9 million prepaid customers.
Paul Orban, executive vice president and chief financial officer at Dish, said that “we feel confident about [Dish’s ability] to pay the purchase price for Boost with cash on hand.”
Dish won’t have to build out its own network nationwide before being able to sign up customers, because when subscribers leave its footprint they will seamlessly roam onto the new T-Mobile’s network, Mr. Ergen emphasized.
Mr. Ergen added that the company still plans on “spending about $10 billion” on its network buildout, but with the MVNO agreement that will allow it to use the T-Mobile network it expects that both its cap ex and op ex outlays will be lower in the early years “than we envisioned initially.”
“We’re going to need help” from “people who have backhaul, towers,” and other assets required for the network, he said. “Where somebody else has some of those things, we don’t intend to reinvent it if they want to work with us.”
Asked where the company will get the money for the buildout, Mr. Ergen mentioned cash on hand, cash flow from both the satellite TV and wireless business, and borrowing. “I’m certainly willing to put more money in this business if that’s what it takes,” he added.
He noted that the company released a request for information and a request for proposals “today regarding the 5G network.”
Asked how Dish will differentiate itself from wireless competitors, Mr. Ergen said, “We’ll be able to slice our network in any number of ways. One of the big slices of our network will be our own retail network to compete against the incumbents.” He added, “We’re well over 100 MHz of spectrum. … We actually have more downlink low and mid spectrum than Verizon. … If you get 120 million customers, that might only take 30% of our network.”
Asked whether there are synergies between the satellite TV and wireless businesses, Mr. Ergen pointed to existing call centers, sales, distribution, and trucks. “Boost is an awfully similar business to ours,” he added, noting that both are customer-facing businesses that requires “collection of money each month.”
Asked about criticisms that Dish isn’t credible as a wireless player, Mr. Ergen said, “I’m insulted when somebody says there isn’t credibility.” —Lynn Stanton, [email protected]
MainStory: WirelessDeployment FederalNews FCC
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