DISH Network (NASDAQ: DISH) is sticking with its 5G network build plan. It successfully met its first deadline to cover 20 percent of the U.S. population on June 14, 2022, as Inside Towers reported. Next, it must reach 70 percent of POPs by June 2023. DISH expects to reach that milestone with a minimum of 15,000 5G sites. As of September 30, 2022, the company had completed construction on over 10,000 5G sites, which already provide broadband coverage to over 35 percent of POPs. To reach its June 2023 target, it is maintaining a construction pace of approximately 1,000 new 5G sites per month.
That’s an important date. If DISH reaches over 50 percent but less than 70 percent of POPs by June 2023, that deadline will be extended automatically to June 2025, but DISH could face substantial penalties as a consequence. By June 2025, the company must reach 75 percent of POPs. That date is also significant because DISH must activate its 600 MHz low-band licenses by then. The company says it is already deploying 600 MHz at sites being groomed for the 70 percent coverage mark and expects to meet the 2025 requirement.
DISH’s 5G capex is at a $500-600 million per quarter run-rate. From late 2020 through the end of 3Q22, we estimate the company’s cumulative 5G capex is nearly $3 billion. On Wednesday, DISH announced plans to offer approximately $2 billion in senior secured notes to raise money to reach the 70 percent coverage bogey. Certainly, it will need more funding beyond that to reach 75 percent of POPs covered by June 2025.
After the 2023 deadline is met, though, we expect construction activity and associated spending to level out through the latter half of 2023 and into 2024, before ramping up to meet the 2025 date. Nonetheless, DISH is standing by its original $10 billion estimate to build a nationwide cloud native, open architecture 5G broadband network. Having reached this point, the company is confident that its “capital lite” strategy is working and that it will achieve its full 5G network buildout within budget.
DISH is leveraging several key aspects to its strategic advantage:
- Open RAN: DISH points out that building a true 5G standalone, cloud-native network costs much less than a proprietary, closed-architecture network. Though its own systems integrator, the company is utilizing big vendors like Samsung, Cisco, and Dell along with third-party integrators to bring together the disaggregated O-RAN elements.
- Fewer Cell Sites: Once operational nationwide, DISH thinks that it will have substantially fewer cell sites than each of the Big 3 MNOs have in their networks. DISH is locating its cell sites in high volume urban markets. At the same time, it is willing to forgo deployments in less populated areas where lower traffic volumes do not justify the investment. Roaming and MVNO agreements with T-Mobile and AT&T provide DISH customers with connectivity anywhere outside of DISH’s coverage area.
- Enterprise Growth Opportunity: A deep portfolio of spectrum licenses across low-, mid- and high-band frequencies allows DISH to offer Enterprise customers cloud-native 5G-as-a-service for private networks. With dedicated, licensed spectrum as opposed to using unlicensed or GAA CBRS frequencies, DISH provides security and capacity for a true private network operation. As such, the company is receiving interest in several vertical markets.
- Unique Devices: In March, the FCC approved two new Motorola Band 70 phones. Band 70 is the unique 5G NR FCC-approved frequency band created specifically to combine the array of frequencies that DISH has won in FCC auctions over the past decade. Such phones will only operate on DISH’s 5G network with features not available yet with iPhones or Android devices. Band 70 is unusual because it is an asymmetric paired band, with separate uplink and downlink frequencies, and greater downlink bandwidth. The downlink has 25 MHz in 1,995-2,020 MHz, utilizing DISH’s 1900 MHz H block and AWS-4 frequencies, while the uplink spans 15 MHz in 1,695-1,710 MHz, DISH’s AWS-3 spectrum. Currently, DISH’s Boost Mobile prepaid phones are not equipped for Band 70 and instead rely on frequencies used by MVNO partners, T-Mobile and AT&T. DISH’s new Boost Infinite service, scheduled for early 2023, will use an expanded lineup of Band 70 devices.
By John Celentano, Inside Towers Business Editor
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