Dish’s $10B Estimate for 5G Wireless Network Build ‘Just Silly,’ Analyst Says

Charlie Ergen’s earlier stated figure is juxtaposed against the $15 billion a year Verizon pays just to maintain a network that’s already been constructed, analyst Craig Moffett says
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Now that at least some of the dust has settled, and it appears Dish Network will actually build a network around its vast wireless spectrum holdings rather than sell them or simply let the licenses expire, the issue of how much it will cost to build said 5G wireless network is achieving pertinence.

Let’s just say that Dish Chairman Charlie Ergen’s earlier stated estimate of $10 billion isn’t being taken all that seriously.

“Verizon spends $15 billion annually to maintain a network that they’ve already built. The idea that Dish might spend $10 billion (their own estimate on previous conference calls) and then somehow be finished is, well, just silly,” wrote MoffettNathanson analyst Craig Moffett.

Last fall, Ergen appeared at a Deutsche Bank investor conference, sounding what the investment bank described in a research note as a “bullish tone on the ‘paradigm shift' 5G presented.”

Ergen, Deutsche Bank said, “was steadfast in expressing his enthusiasm toward building a ‘real 5G network,’ and reiterated that the cost of to build the nationwide 5G network would be about $10 billion.”

Earlier this week, Dish came to terms with T-Mobile on a $5 billion deal that will turn the satellite TV company into the fourth major wireless carrier in the U.S. Establishing that presence was the only way the Justice Department would approve T-Mobile’s purchase of the incumbent No. 4 U.S wireless carrier, Sprint.

Dish is paying around $1.5 billion to acquire T-Mobile’s pre-paid business, Boost Mobile, and another $3.5 billion for spectrum assets.

As part of the agreement, Dish has mobile virtual network operator (MVNO) access to sell wireless service on T-Mobile’s network at wholesale for seven years, giving it time to build its own wireless infrastructure.

Notably, Dish agreed to a clause that restricts it from being acquired for three years. T-Mobile was concerned that Comcast, Google or another company with wireless ambitious would swoop in, buy Dish and exploit the MVNO access to its network.

Investors have hammered Dish for making the deal. It was one thing when Dish was a struggling satellite TV company that happened to have a lot of wireless spectrum lying around that could be sold. It’s quite another thing, he noted, to evaluate the company as a company facing an enormous infrastructural buildout, slugging it out in the very mature, very competitive U.S. wireless business.

Then again, it’s not the satellite TV business. 

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