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Dish to launch 5G in 'major' city by end of Q3

Dish Network is on track to launch its 5G network in at least one "major" city by the end of Q3 2021 as it remains focused on fulfilling its FCC network buildout commitments in the coming years.

Dish won't say which city will get deployed first, but Charlie Ergen promised it would be a large, "NFL city." He also characterized the initial rollout as a "beta test."

"By the end of the third quarter, you'll be able to take a phone and see if we work or not and see all of the problems – and we'll have them for sure – and then see if we can fix them," Ergen said. He stressed that access to radios is the "long pole in the tent."

"It's a big testbed that I think is going to work – kinda – day one," Ergen said. Once the bugs and kinks are worked out, Dish's 5G network deployments will be "cookie cutter after that," he added. "There certainly will be substantial risk. There's certainly going to be lots of problems. But we have the team and the focus to overcome that."

Shifting to the execution phase

Ergen viewed 2020 as a "transition year" for Dish's mobile business and 2021 as the year that Dish will enter the "execution" phase. That execution piece will ensure that Dish meets its 5G network buildouts with the FCC, which includes coverage to 20% of the US population by June 2022, and 70% by June 2023. Tom Cullen, Dish's EVP of corporate development, noted that RF planning for the 5G network is completed, permitting and zoning activity is underway in dozens of US markets, and Dish has built out a distributed deployment team for the build-out.

Dish invested more than $50 million in opex and capex for 5G in Q4 2020 and expected capex to rise substantially this year as it ramps up the network deployment. Dish reiterated it expects the 5G network deployment to cost about $10 billion in its SEC filing.

Taking a page from Rakuten's playbook, Dish's 5G network aims to be a virtualized, cloud-native open RAN platform. Dish said it "completed a successful field validation" of its virtualized, standalone 5G core using an O-RAN-compliant radio in December 2020.

Marc Rouanne, EVP and chief network officer at Dish, said the company is "now in the second phase of our O-RAN journey."

"We are starting to build," Rouanne said. "We have tested a lot of vendors. We have brought radios, software and compute together and now what we're doing is we are transferring this knowledge to our teams in the field to build it across the US."

One new infrastructure-facing development in Dish's 5G network plan arrived today in the form of a master lease agreement with SBA Communications that gives Dish access to SBA's nationwide wireless communication sites. Under the deal, Dish will lease towers from SBA, and SBA is on tap to deliver a range of "pre-construction functions," including site acquisition as well as regulatory and compliance services.

T-Mobile CDMA shutdown could be costly

Ahead of the 5G network launch, Dish entered the mobile services game by acquiring the Boost prepaid business from T-Mobile and via a deal for Ting Mobile. Dish lost 363,000 prepaid wireless customers, ending 2020 with 9.06 million. Dish chalked up those losses to an ongoing effort to integrate wireless operations, shed unprofitable customers and tweak operations that enhance profitability. Moffett also pointed out that Dish has lost 6.1% of its wireless subs in just six months.

And there's an additional, potentially costly, wrinkle to this piece of Dish's business. Dish disclosed that T-Mobile had alerted it to plans to shut down its 3G CDMA network on or around January 1, 2022. A "majority" of Dish's current retail wireless base still gets services through CDMA, and a shutdown of that network could cause a "significant disruption to our Retail Wireless subscriber base," Dish warned in an SEC filing.

"That means Dish will need to provide new devices for a huge number of customers before the year ends," Moffett noted. Ergen said he has not personally contacted the FCC about the situation but did express concerns about T-Mobile's decision.

"We view it as anticompetitive. It's as simple as that," Ergen said. "I can't speak to their [T-Mobile's] motivations. One of the beneficiaries of premature turn off of the CDMA network would be T-Mobile."


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