Ergen: Dish Has 80% Chance of Wireless Success2/23/2012 2:10 PM Eastern
Dish Network chairman Charlie Ergen said the satellite giant has an "80% chance" of successfully launching its own wireless broadband service, adding if it does not received the necessary regulatory approvals it would have to consider alternatives for its spectrum.
Dish spent about $3 billion last year purchasing about 40 MHz of wireless spectrum from DBSD North America and TerreStar in the hopes of launching its own broadband service in the future, most likely with a partner. However, the company needs the Federal Communications Commission to grant it a waiver to offer the service.
On a conference call with analysts to discuss fourth quarter results, Ergen said he met Wednesday with FCC Chairman Julius Genachowski and that the FCC could issue a decision as early as March 12.
On the call Ergen said that Dish has more than an 80% chance of success in wireless broadband, adding that the hardest hurdle to clear is launching the service itself.
"For the last four years we have been putting things in place to get into the wireless industry, and we think that is a transformative strategy for us," Ergen said. "As we get into that business, I would say we have an 80% chance of success. If so you go full bore and give your best effort. When we started Dish Network, we thought if we could get past the [satellite] launch, we would have an 80% chance of being successful. The hardest part of a new initiative is getting started."
Ergen said he was confident that Dish would be able to receive the necessary waivers, but if not would have to rethink its strategy, including possibly selling the spectrum.
"If by chance we were not granted a waiver or it was kicked down the road without a decision through rulemaking, then I think that we'd have to consider the risk, and at this point, I'd say we probably don't have an 80% chance of success," Ergen said. "We'd have to look at other alternatives with what to do with the business and the spectrum, which would be unfortunate. "
He added that Dish would probably have to write down the spectrum assets if FCC approval did not come, adding that without the waivers "they probably wouldn't be worth the $3 billion or so we paid for them."
Ergen pointed to President Obama's broadband initiatives to increase competition, innovation and availability of wireless high-speed Internet service.
"We have a history of being very disruptive in the video business. I think we would be disruptive in the wireless business," Ergen said. "So that give s us some degree of confidence that we would meet the standard to grant the waiver. If so we're prepared to enter the business and go full force to make a business out of it. It would transform not only our company but transform the way people use wireless in the United States."