Dish Network Chairman Charlie Ergen says his company can build a 5G network using assets it would receive from T-Mobile and Sprint if their merger is approved.
“We know that we do need to strengthen our balance sheet, but we don’t need it tomorrow,” Ergen said Tuesday in an interview with The Wall Street Journal. Dish ended June with about $13 billion in debt and some $3 billion in cash or investments. However the company must still find a way to pay for the network which will cost about $10 billion to build. Dish has said it can buy the Sprint accounts with cash on hand.
“We don’t need $10 billion tomorrow. In fact, we don’t need any money tomorrow,” Ergen told the WSJ. That’s because the company is building a 5G network from the start and does not need to retrofit a legacy network, Ergen said after the Justice Department approved the deal July 26, Inside Towers reported.
The deal announced by the DOJ would give Dish more than 9 million Sprint wireless customers, the right to take over abandoned cell towers and preferential access to T-Mobile’s network while its own network is under construction. Dish would also get access to T-Mobile’s network for up to seven years under preferential terms that would reduce its operating costs.
Though FCC Chairman Ajit Pai has said he’s inclined to okay the transaction, the agency has yet to issue a formal decision. Dish has asked the FCC for more time to meet obligations attached to its spectrum licenses.
Everything hinges on T-Mobile acquiring Sprint, which is not a certainty, reports the WSJ. A coalition of state attorneys general seek to block the proposed purchase in federal court. A trial is due to begin in December.
Unclear is when Dish’s new wireless service would start and how profitable it may be. “Until now, Dish’s spectrum has been valued as if it’s an asset held for sale,” said Craig Moffett, an analyst for telecom and media research firm MoffettNathanson. Now, “the market is coming to grips with the fact that Dish is going to be a network builder rather than a seller,” according to the account.
Cowen analyst Greg Williams said it’s too early to measure Dish’s value using a normal wireless-industry yardstick, though he said there is plenty of upside for the company if an investment partner like Google owner Alphabet or Amazon partners with Dish. After the DOJ deal was announced, Ergen said Dish does not intend to reinvent the wheel and would look for companies to partner with on various aspects of its new wireless business, Inside Towers reported. Comments? Email Us.
August 8, 2019
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