In its 3Q21 earnings call, DISH Network (NASDAQ: DISH) confirmed that its first 5G market, Las Vegas, now is in “beta” test mode. This means that the network is being tested by test users with 5G-enabled devices although no calls are going outside the network. This way DISH evaluates and tweaks the network performance across its operating footprint before going live.
At the same time, DISH acknowledged some software glitches between the Open RAN radios and the Core causing the Las Vegas market operational date to be delayed into 1Q22.
Delays on new network builds are not uncommon. DISH faces tight coverage targets, however, set by the FCC and DoJ that it agreed to meet to become a fourth nationwide 5G network in the U.S. in the aftermath of the T-Mobile-Sprint merger.
DISH is utilizing four spectrum bands for its 5G build – low-band 600 MHz and Lower 700 MHz E Block, and mid-band AWS H Block and AWS-4. Carrier aggregation allows DISH to combine these different bands to facilitate high-speed connections.
In its September 11, 2020 Order, the FCC Wireless Telecommunications Bureau stipulated that with AWS-4, Lower 700 MHz E Block and AWS H Block licenses, DISH must offer 5G broadband service to at least 20 percent of the U.S. population and have deployed a core network no later than June 14, 2022, and to at least 70 percent of POPs by June 14, 2023.
With 600 MHz, DISH must offer 5G service to at least 75 percent of POPs in each Partial Economic Area by June 14, 2025.
DISH management is confident of meeting those commitments. The company indicated that it currently has 42 markets under development, covering every municipality with more than 500,000 people. These markets are mainly in the middle of the country where DISH is taking advantage of co-locating on existing towers as opposed to building in high-cost, heavily populated east and west coast markets.
Beyond its commitment of 15,000 towers by June 2023, the company has not disclosed the number of sites it may need although it does not believe that reaching 20 percent POP coverage bogey will require that scale.
DISH’s wireless segment operates in two business units, Retail Wireless and 5G Network Deployment.
Retail Wireless generates service revenues from the Boost Mobile prepaid business acquired from T-Mobile. DISH subsequently acquired Ting Mobile and Republic Wireless to expand its prepaid offering. Retail Wireless 3Q21 service revenue was $1.04 billion, down 4 percent on a year-over-year basis, primarily due to the loss of 121,000 subscribers in the quarter.
5G Network Deployment revenues totaled $46 million for the nine months that ended September 30, 2021, up $40 million compared to the same period in 2020. This increase resulted from leasing 600 MHz spectrum licenses to T-Mobile. That lease began on September 11, 2020, and was originally valued at $56 million annually over its 42-month term. DISH expects that amount to decrease as it terminates individual license rights before the term ends.
5G Network capital expenditures totaled $527 million for the nine months ended September 30, 2021, up $463 million compared to the same period in 2020. DISH anticipates 5G network capex to increase substantially throughout the remainder of 2021 and into 2022, as it ramps up the build-out phase.
The company thinks it can build its 5G network at considerably lower costs than its competitors. DISH has committed $10 billion in capex over a 7-year period through 2027. That expenditure likely will ramp significantly to meet its build out commitments in 2023, then should level out in subsequent years. By contrast, AT&T, Verizon, and T-Mobile are investing over $10 billion each year for the next several years.
Funding its 5G network build is a challenge. DISH is not yet generating 5G service revenues and free cash flow to pay for required research and development, network construction, and system testing. Moreover, it may need additional spectrum licenses to complete the 5G network deployment and to compete with other MNOs.
In its earnings call, DISH suggested it also could raise money by leasing some of its spectrum inventory to help AT&T and Verizon through their C-band deployment delays.
For a deep dive, read “DISH Network: A Strategic Analysis” in the Q2 2021 issue of Intelligence by Inside Towers. For more information, join our Intelligence Briefing this Wednesday, November 10 at 1:00 PM EST. You must be an Intelligence subscriber to join. Subscribe here.
By John Celentano, Inside Towers Business Editor
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