Finance

Ergen: Dish Doesn’t Need a Partner to Build Wireless Network

Says company can meet 2020 deadline on its own 5/01/2017 5:36 PM Eastern
Charlie Ergen

Dish Network chairman and CEO Charlie Ergen reiterated his commitment to build out the majority of its wireless network by the prescribed federal deadline, adding that the satellite TV company doesn’t need a partner to do so.

That’s a bit of a departure from Ergen’s earlier stance a few years ago, when he said it didn’t make sense to start the buildout without a strategic partner to help shoulder the cost. 

Dish has until March 2020 to build out 70% of its wireless network. And while Ergen said it was more than willing to go it alone, there is ample time to find a cohort.

“Our focus today is to build out to meet the 2020 deadline with or without a partner,” Ergen said on a conference call with analysts to discuss first quarter results. “We’re prepared to do it within our balance sheet and again, it’s going to be a new, narrowband IP network that doesn’t exist today. Obviously, I hope there is the opportunity in the next three years for a lot of potential partnerships.”

Ergen said those potential partners could be incumbent wireless companies like Verizon or AT&T, or they could be new players to the game.

Ergen went back to the early days of the DBS business, when he tried to get other companies to build satellites for Dish but nobody would do it. The company decided to build them on its own. This summer they will launch their 23rd satellite.

“Thank God nobody wanted to build them for us, because it would have cost us a lot more money,” Ergen said. “Part of management is to figure out how you can do things and to be creative on how you’re going to do things and to prove the skeptics wrong.”

Ergen sees connectivity as the future of the communications business, adding that despite some gains on the cable side, the satellite and cable TV business will be smaller in five years than it is today.

“With satellite and phone companies you’re already seeing reductions over the past couple of years. Cable, with the strength of broadband, has been able to tread water and gain some subs, but ultimately that will reverse,” Ergen said. “I see a natural evolution to OTT products. The question is what the OTT bundles will look like.”

But Ergen said the one thing that allows him to sleep well at night is that all of those OTT customers will need connectivity.

“That means that you need wireless spectrum to connect,” Ergen said, adding that cable’s recent moves into the wireless market may not be enough.

Earlier this month Comcast unveiled Xfinity Mobile, a wireless service that runs on the Verizon wireless network via a Mobile Virtual Network Operator agreement. The service is currently in employee trials and is expected to see widespread residential rollouts before the end of the current quarter.

“I do believe that the cable industry has to take a good hard look at how they participate in this industry, and potentially much more so than an MVNO deal,” Ergen said. “I do think more and more people from Silicon Valley need to look at it more seriously, not just because perhaps net neutrality regulations being weakened, but because their business depends on connectivity.”  

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