Finance

Ergen: Dish Is Ready for 5G

Dish Network chief says company can start buildout with or without a partner 2/22/2017 2:01 PM Eastern

Dish Network chairman and CEO Charlie Ergen said the satellite TV service provider could begin to build out its wireless spectrum in time to meet federally-imposed deadlines, adding that with new 5G technology, Dish doesn’t necessarily need a partner to do it.

Dish has long planned to use its vast wireless holdings to create its own high-speed network. But in the past Ergen has always said Dish would likely need a partner to help shoulder the cost.  Now, with the advent of cheaper, more reliable 5G technology, his tune has changed.

On a conference call with analysts and reporters to discuss fourth quarter results, Ergen said Dish has already started preliminary work on the network build.

“We haven’t been standing still,” Ergen said, adding that Dish has been making preparations, including putting its spectrum in licensed bands, carrier aggregation and conducting some tests on the broadcast side for its 700 MHz spectrum.

“We feel pretty good about it,” Ergen said. “This is not our first rodeo.”

Most wireless companies are planning to launch 5G, which has smaller cell sites, greater capacity, less latency and better reliability, in the next few years. Already Verizon has begun trials of a service – which it plans to launch in select markets by mid-year -- and AT&T and Nokia have started testing 5G delivery of the former’s DirecTV Now OTT service. 

According to some analysts, Dish’s first FCC deadline next month would require that it complete a buildout of 50% of the country. But that is an interim deadline – the real test will be in March 2020 when Dish is required to have completed the build out to 70% of the U.S.

Ergen said that March 2020 target is what the company is focusing on, likening it to Dish’s first plans to launch a satellite TV network.

“We decided in 1992 that we were going to build satellites and by 1995 we launched our first satellite and we were able to cover the whole country and utilize our licenses,” Ergen said. “It was a complex three-year build… My experience has been those things go a lot smoother when you spend a fair amount of your time planning and not just doing things and then changing things. We’ve spent a lot of time planning and we feel like we’re in pretty good shape.”

This isn’t the first time Ergen has reassured analysts that Dish was on track for the wireless buildout. Last June he told about 80 analysts gathered in a Denver hotel that plans were moving forward, which fueled optimism about the company and boosted the stock.   

Dish hasn’t been able to work with a partner on the planning phase because of anti-collusion rules connected to the ongoing federal spectrum auction, in which Dish is among the participants. But Ergen said those restrictions are expected to be lifted in the next six-to-seven weeks.

“It’s all going to come together in the next couple of months,” Ergen said. “We will communicate to the FCC and The Street about what we are doing.”

Ergen added that while the focus has been on an organic buildout of the network, that doesn’t mean it can’t partner with other companies on certain aspects of the build.

“Even without M&A, as others build out, there are opportunities to do joint things,” Ergen said. “I am definitively saying we believe we have a plan to build out the part of the spectrum that is due in 2020. Obviously things could change, but we continue to believe we can control our own destiny. We do not need to do an M&A transaction to meet the buildout schedule.”      

   

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