Dish Network, which is constructing a 5G wireless communications network of its own, has signed a long-term strategic network services agreement with AT&T that makes AT&T its primary network partner for its mobile virtual network operator customers. Dish disclosed the agreement this morning, and the price of shares in AT&T fell more than 2 percent on the news, with Dish losing 1.5 percent.
“Through this agreement, Dish will provide current and future customers of its retail wireless brands, including Boost Mobile, Ting Mobile and Republic Wireless, access to best-in-class coverage and connectivity on AT&T’s wireless network, in addition to the new Dish 5G network,” a statement from Dish reads. “The agreement accelerates Dish’s expansion of retail wireless distribution to rural markets where Dish provides satellite TV services. AT&T is also providing transport and roaming services as part of the agreement, to support Dish’s 5G network.”
Dish is committed to providing competition in the wireless market as the nation’s fourth facilities-based carrier, according to the statement, which said that the company will continue to build out the nation’s first cloud-native, OpenRAN-based 5G network reaching over 70 percent of the population by 2023.
“Teaming with AT&T on this long-term partnership will allow us to better compete in the retail wireless market and quickly respond to changes in our customers’ evolving connectivity needs as we build our own first-of-its kind 5G network,” said John Swieringa, Dish chief operating officer and group president of retail wireless. “The agreement provides enhanced coverage and service for our Boost, Ting and Republic customers, giving them access to the best connectivity on the market today via voice, messaging, data and nationwide roaming on AT&T’s vast network, as well as Dish’s 5G network.”
According to Dish, AT&T has been recognized as the Nation’s Best Wireless Network two years in a row, according to America’s biggest test. Dish cited AT&T 4G LTE as receiving the best network designation from GWS OneScore 2020. GWS conducts drive tests for AT&T and uses the data in its OneScore analysis, according to Dish.
“Fast, reliable and secure, AT&T 5G is available to 250 million people across the country over sub-6-GHz spectrum and millimeter-wave spectrum (AT&T 5G+), which is available in parts of 38 cities and at more than 20 venues, including high-traffic places like stadiums, arenas, airports and campuses,” the Dish statement reads. “AT&T plans to cover 200 million people across the country with C-band (mid-band) 5G by the end of 2023.”
Dish said that for many years, AT&T has been a leader in connectivity. Between 2016 and the end of the first quarter 2021, AT&T has invested more than $140 billion into its wireless and wireline networks, including capital investments and acquisitions of wireless spectrum and operations, to support market demand for communications, Dish said. The agreement allows AT&T the opportunity to use a portion of Dish’s spectrum in various markets to help support Dish customers on AT&T’s network, the statement from Dish added.
“Teaming with Dish on this agreement is not only a testament to the strength of our network, but it further validates the investments we’ve made in our fiber and wireless infrastructure,” said Thaddeus Arroyo, CEO of AT&T Consumer. “We welcome Dish wireless and its customers to the nation’s largest and best wireless network for all of their streaming, data and roaming needs.”
A senior analyst at data and analytics company GlobalData, Tammy Parker, said that the deal would be highly beneficial to AT&T, because the company not only would gain at least $5 billion in revenue from new mobile virtual network subscribers during the term of the 10-year agreement, it also would have access to Dish’s spectrum holdings to support Dish customers on the AT&T network. The network services agreement is not exclusive for either party, so both can go out and find new dance partners, as she put it; however, given the depth and breadth of this agreement, that would appear both unlikely and unnecessary.
“Both companies are poised to ride the U.S. wireless industry’s ongoing growth wave,” Parker said. “This is increasingly driven by the rollout of 5G, which enables faster network speeds, lower latency and new use cases, including internet-of-things services, that will result in many users having multiple wireless subscriptions. According to GlobalData’s latest forecasts, the number of unique mobile users in the United States will increase by 5 percent over the next five years. Furthermore, total mobile subscriptions in the United States will expand by more than 30 percent during that time, and there will be nearly 692.6 million U.S. mobile subscriptions by year-end 2026.
Parker said that a fascinating part of this new arrangement is that it provides a glimpse into AT&T’s concerns regarding the possibility that Dish could sell out to another entity, perhaps even Amazon or Google. Rumors have abounded, even before Dish agreed to build its 5G network on Amazon Web Services’ (AWS) cloud platform, about possible negotiations between Amazon and Dish regarding the former’s potential use of Dish’s forthcoming 5G network to offer new services, Parker said.
“Although there is nothing new to report there, this network services agreement stipulates that AT&T will be allowed to terminate the agreement in the event of a qualifying change of control of Dish,” Parker said. “This could include a rival wireless provider, U.S. cable company or ‘certain large technology companies’ taking over 50 percent more of the voting power or economic value of Dish. AT&T would still have to support Dish’s mobile virtual network operator customers for up to two years after such a termination.”
T-Mobile, with its Sprint network, is the primary mobile virtual network operator partner for Boost and Republic, Parker explained. Ting operates on every nationwide network except AT&T, she said; however, although Dish’s involvement saved T-Mobile’s acquisition of Sprint, the relationship between Dish and T-Mobile appears to have been fraught from the start.
“T-Mobile’s plans to shutter its 3G network by January 2022, leaving many of Dish’s customers without network service, has created an especially contentious standoff between the two companies, which likely helped pave the way for Dish’s new agreement with AT&T,” Parker said.
Craig Moffett and Nick Del Deo of MoffettNathanson Research published a blog post in which they expressed their analysis of the agreement between Dish and AT&T.
“AT&T has all but assured Dish’s survival, and as a much more disruptive and dangerous competitor than would otherwise have been the case,” the post reads. “AT&T has been signaling recently that they want more wholesale business when they can get it, so perhaps we shouldn’t be surprised. They clearly decided that the short-term gain of additional wholesale revenue was worth that risk. But they’d be well advised to be careful what they wish for. We see their decision to extend this deal to Dish as a catastrophically bad one. Dish and its investors should thank their lucky stars for AT&T’s strategic blunder.”
About Dish Network
Background information supplied by Dish describes the company as a connectivity company. “Since 1980, it has served as a disruptive force, driving innovation and value on behalf of consumers,” the information reads. “Through its subsidiaries, the company provides television entertainment and award-winning technology to millions of customers with its satellite Dish TV and streaming Sling TV services. In 2020, the company became a nationwide U.S. wireless carrier through the acquisition of Boost Mobile. Dish continues to innovate in wireless, building the nation’s first virtualized, O-RAN 5G broadband network.”
FCC Acting Chairwoman Jessica Rosenworcel has announced what she called breakthrough agreements with America’s three largest mobile phone providers to start delivering vertical location information in connection with 911 calls nationwide in the coming days.
“This information will help first responders quickly locate 911 callers in multistory buildings, which will reduce response times and ultimately save lives,” a statement from the federal agency reads..
The FCC adopted rules to improve location information for 911 wireless calls in 2015. Those rules required nationwide wireless providers to deploy dispatchable location or meet certain z-axis location accuracy requirements in the nation’s largest 25 markets by April 3, 2021, and to certify to such deployment by June 2, 2021. According to the statement, AT&T, T-Mobile and Verizon sought an extension of these deadlines, based in part on challenges with testing z-axis solutions due to the COVID-19 pandemic. In April, the FCC announced an Enforcement Bureau inquiry into these providers’ compliance with the FCC’s deadlines as well as the current capabilities of z-axis solutions.
“To improve public safety and greatly speed up nationwide implementation of vertical location information, the FCC’s Enforcement Bureau reached settlements with AT&T, T-Mobile and Verizon that resolve the investigations,” the statement reads. “The settlements require each company to start providing wireless 911 callers’ z-axis location information to 911 call centers within seven days; to implement a compliance plan that includes specific testing, reporting, and public interest conditions; and to pay a $100,000 settlement amount.”
According to the FCC, these enforceable commitments extend beyond the 25 largest metropolitan areas required under FCC rules and instead assure that vertical location information will be made available to public safety entities nationwide. The settlements also will provide public safety stakeholders with greater visibility into industry progress toward dispatchable location and floor-level accuracy and guidance on receiving and using z-axis information. Under these agreements, the FCC, carriers, and public safety can move forward collaboratively to better protect American lives.
“Six years is too long to wait for 911 vertical location information that can save lives,” said Rosenworcel. “These settlements accomplish what has evaded the agency for too long: They ensure that the FCC, public safety and wireless carriers work together to immediately start delivering this information to first responders without further delay. They also ensure that we are improving our 911 location accuracy capabilities everywhere in the country and not just in the top 25 markets. This progress will advance important public safety objectives and benefit all Americans.”
The settlements, formally called Consent Decrees, are available at:
At J.P. Morgan’s 49th Annual Telecom, Media and Communications (TMC) Conference, a virtual experience held May 24-26, Verizon CEO Hans Vestberg, T-Mobile CEO Mike Sievert and AT&T CEO John Stankey talked about the role that fixed wireless will play at their companies. The CEOs spoke during separate company forums, either interviewed by analysts from J.P. Morgan and queried by company shareholders, at the event.
Verizon’s Vestberg said that the convergence between fixed wireless and mobile presents no risk for his company. “We don’t see it as a risk — we see it as a huge opportunity, “he said. “I mean, of course we have broadband in our Fios footprint which is doing extremely well at the moment because broadband is a necessity in our society. Now outside that footprint, we can now actually get broadband business which is basically for us, yes net new revenues. So, I see it as a great opportunity rather than a risk. I see it is an opportunity also that I have so many customers on wireless and knows my brand and know how well we’re performing, and that also will be extremely interesting in our fixed wireless access.
“We have now been working for two and a half years with our portfolio on fixed wireless access, all the way from the network, from the devices, from how to self-install, to the building, to the pricing, to the offerings on top of it,” Vestberg said. “And I said, this year we’re going to go for 50 million households a combination of 4G, the 5G mmWave and C-Band, so we’re opening up open for sale right now and that side is a great opportunity rather than any risk at all.”
Speaking at his company’s forum, T-Mobile CEO Mike Sievert said his company’s rural plans not only include mobile, but also fixed wireless. The company last month made 5G Home Internet fixed wireless available to 30 million U.S. households, including 10 million in rural areas.
T-Mobile made a wide range of commitments involving rural areas as a condition of regulatory approval of the Sprint merger, which means that the company’s focus on rural areas is not discretionary but mandatory. At that time, the company also launched what it calls T-Mobile Hometown — an initiative that will bring T-Mobile retail stores to hundreds of small towns over the next two years. Sievert noted that T-Mobile’s competitive position varies from one rural market to another, however. “We class every location” based on the extent to which “we have a full license to win,” he said.
AT&T’s Stankey said that fixed wireless will play a larger role in the company’s future — a strategy that differs from Verizon’s take at the same conference. AT&T appears to be looking to fixed wireless as a way to retire DSL in its non-fiber markets, rather than go on the offense in urban areas. The company has already stopped taking new orders for DSL. Asked by a J.P. Morgan analyst when an AT&T fixed wireless product would be ubiquitous across the operator’s footprint, Stankey pegged the 2023 timeframe for covering most people in the United States.
“You know, we’re not as robust in our point of view on what fixed broadband can do in urban and highly attractive suburban areas, but what we do believe is that fixed wireless plays a role in other parts of our footprint,” Stankey said, according to a Seeking Alpha transcript of his interview. “There’s no question where we’ve had lower speed, you know, DSL . . . that a fixed wireless solution in the outer reaches of what used to be ILEC footprint, could be a good solution for us, and for those customers.”
Mike Harrington is a contributing editor.
AT&T gave more details about the deployment of the 80 megahertz of C-band spectrum that it won in the FCC’s Spectrum Auction 107 last week at its Analyst & Investor Day. The company plans to begin deploying the first 40 megahertz of this spectrum by the end of 2021, according to Jeffery Scott McElfresh, CEO of AT&T Communications.
“We’re already hard at work readying the network,” he said. “We’ll be on pace to cover roughly 70 million to 75 million pops by the end of 2022, and we will surpass 100 million POPs early in 2023.”
AT&T expects to spend $6 billion to $8 billion in capex deploying the C-band spectrum, with the vast majority of the spend occurring from 2022 to 2024. Expected C-band deployment costs are already baked into its 2021 capex guidance.
“Over the last couple of years, we’ve stepped up our investments in our wireless network as we have deployed our FirstNet program in Band 14 with our efficient single touch approach,” McElfresh said. “And as that program begins to enter its final stages, we’re shifting our investments in wireless to more densification, which includes the deployment of our C-band spectrum. So it will be an allocation shift within our current portfolio.”
Many have questioned how the C band bid would affect AT&T’s leverage. The carrier explained how it will pay for C-band spectrum, for which it bid $27.4 billion.
In 2021, the company expects to have access to cash totaling at least $30 billion, including cash on hand at the end of 2020 of $9.7 billion, commercial paper issued in January 2021 of $6.1 billion and financing via a term loan credit agreement of $14.7 billion. At the end of 2021, the company expects to hit its target net debt-to-adjusted EBITDA ratio of about 3x.
Advances in technologies such as carrier aggregation and antenna design have helped improve the speed of its network, according to McElfresh. The carrier still has 30 percent of its low and mid-band spectrum to deploy, which will further drive performance in the top 50 urban areas.
McElfresh is confident about AT&T’s spectrum position, saying the carrier can count on additional spectrum coming on the market.
“The secondary spectrum market is opening up, and technology advances have proven time and again to level the network playing fields in the wireless industry,” he said. “Our network has never been stronger, and we remain committed to investing in our wireless network and are confident we’re equipped with a solid spectrum position.”
John Stankey, AT&T president & COO, was upbeat about the FirstNet build and its impact on the network as a whole and the carrier’s progress building 5G. at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco.
FirstNet now has 1.1 million first responders subscribing to its network and AT&T is building more towers to fill in coverage,
“We’re hitting on all cylinders in our FirstNet deployment,” Stankey said. “We are increasing the number of cell towers that we have in place to fill in where maybe we had some weak spots. That will further enhance that network value proposition.”
AT&T finished February with 80 million POPs covered for 5G and expects to be nationwide by the end of the second quarter of this year.
“We feel pretty good about how we’re going about doing that. And in our case, the vast majority of it is by laying up new spectrum that’s set up on 5G, and that’s probably the purest and best way for us to do that,”
Stankey admitted that the sub-6 deployment does not represent a big increase in the speeds at the handset, but the 5G Evolution speeds, in many cases, are competitive to other 5G deployments because of the depth of the carrier’s spectrum depth.
AT&T plans to increase ARPUs selling higher value unlimited plans, whic include improved performance of the wireless service and access to the HBO Max movie service. Look for Christmas holiday promotions.
“The launch of HBO Max and our ability to promote that into the wireless segment will be another driver that will drive interest in the market,” Stankey said. “So we expect we’re going to see some momentum flow through on that as well.”
Stankey sounded confident about AT&T’s current spectrum position and its ability to secure new spectrum at the Citizens Broadband Radio Service and C-band auctions “And we stand today, we have a spectrum portfolio that we can run the plays we need to run on and we can be very deliberate around what we want to do in the forthcoming auctions and not feel like our back is against the wall on timing.”
AT&T’s fixed line infrastructure in key markets, including fiber optics, will provide the foundation for it to move on the 5G+ or millimeter wave deployments that it thinks take will take it to the next level, Stankey said.
“We are running those plays right now. We were running those plays a year ago. And we’re going to continue to run those plays. And I think it’s that market momentum that you’re seeing as a result of that.”