The big question in the wireless industry is no longer what will Charlie Ergen do, but when will he do it. During Dish Network’s fourth quarter earnings call, top executives did not give up too many details but revealed that the new 5G network will use open RAN vender-neutral technology.
“We want to start deploying later in 2020,” said Timothy Messner, Dish general counsel. “We’re very cognizant of the FCC obligations that we’ve made, and we actually look forward to beating them.”
Job one is to integrate with the Boost Mobile, a mobile virtual network operator, so Dish will be operational as soon as it is possible, according to Messner. The architecture of the network must also be finalized, contracts with multiple vendors must be finalized and deployments must be planned.
Erik Carlson, Dish president and CEO, did not speak with a much of a sense of urgency when it came to tower deployment.
“The big picture is, because we have the use the T-Mobile network for seven years along with some of the towers, we have a pretty big safety net. It gives [us] a little bit more leeway in terms of how we build our network,” Carlson said.
As part of the Sprint/T-Mobile merger, Dish will have access to 25,000 towers and retail stores that will be vacated by Sprint. Perhaps the speed of Dish’s buildout will be tempered by the pace of T-Mobile’s decommissioning of Sprint sites. Ergen, Dish chairman, would not signal his next move concerning tower deployment, but he did note that using Sprint’s towers, many of which are owned by Crown Castle, would be economical.
“T-Mobile is not allowed to squat on the towers, and they are required to give us notice when they’re going to vacate a tower,” Ergen said. “That probably helps on the margin on our buildout and perhaps reduces some of our costs.”
John Swieringa, chief operating officer at Dish, added that the newly available RAD centers of the decommissioned Sprint sites would be at attractive heights, so Dish will be watching closely as the towers become open.
Dish’s strategy is to use its ample spectrum (100 megahertz in some markets) over a low-cost network, which will compete on price. To do this , the carrier will employ alternate methods to build its network for less money through strategic partners and operate it for less. The architecture that Dish has decided on is open RAN (ORAN), which also lowers costs.
“We have fewer people because of automation and our network is primarily going to be software and will be in the cloud, versus the carriers’ hardware networks today,” Ergen said.
Carlson added that none of the existing carriers use ORAN, which requires less proprietary equipment. “But that is without question the way a modern network should be architected. And once you architect it that way, it opens up a whole different set of range of options,” he said.
Marc Rouanne, Dish chief network officer, explained that Dish has been working on ORAN for the last few months and that he sees it as a trend in wireless infrastructure because it reduces the changeout of radios as a network evolves.
“You put the radio on top of the tower and then you can do whatever you want on the rest of the network. It will never impact again your radio. So, you can choose the vendors, but you can also have long-term sustainability of your radio deployments,” he said.
Quotes courtesy The Motley Fool.
The federal trial to decide the fate of the State’s lawsuit against the Sprint/T-Mobile provided some new details on how Charlie Ergen, CEO of Dish Network, will build out his 5G network, if the merger goes through.
The company’s strategy for its 5G network calls for 2,500 towers by 2021, 10,000 sites by 2022, 15,000 sites by 2023, 30,000 sites by 2023 and eventually 75,000 sites, according to statistics provided by New Street Research (NSR). Dish’s NB-IoT network will comprise 1,000 sites.
“The inclusion of Dish into the T-Mobile / Sprint merger is positive for the towers in three respects: first, it eliminates the prospect of the worst-case scenario for the towers (a T-Mobile / Sprint deal without conditions); second, it will likely drive a faster network build from Dish; and third, the towers will likely capture more revenue from Dish building independently rather than with a network partner as we previously assumed,” Spencer Kurn, NSR analyst, wrote.
Since Ergen’s testimony, the Wall Street Journal reported that banks are willing to lend Ergen $10 billion to build the 5G network.
Charlie Ergen, the wireless industry’s version of the international man of mystery, outlined his two-phase, IoT followed by 5G, plan for deploying his bountiful spectrum portfolio before a packed audience at the Connectivity Expo, Connect (x), conducted by the Wireless Infrastructure Association, this week in Charlotte, North Carolina. He was interviewed by Former FCC Commissioner, now with Cooley LLP, Rob McDowell in a keynote session.
“We are in a bit of an awkward position with only 5 megahertz of spectrum for uplink that has been cleared nationwide in the H Band, so we will go through two phases,” said Ergen, co-founder and chairman of Dish Network. “In the first phase we will build a nationwide network for narrowband IoT and in the second phase we will build a complete 5G network.”
Ergen began buying spectrum 15 years ago and in the last three auctions was the highest bidder. He pins his hopes on the timing of the network deployment.
“It’s all about timing; too early you are roadkill, if you get it just right you have a chance,” Ergen said. “We missed the 4G shift because of the regulatory reasons. The next big paradigm shift is 5G.”
Narrowband IoT Network Build
Facing an FCC-imposed deadline of a little more than 650 days, Ergen is focused on moving forward with IoT network building. Radios have been ordered, the core network will be built out this summer and testing will begin this fall, with the help of multiple partnerships in the industry. It will cost between $500 million and $1 billion.
“We are new. We have never built a terrestrial network before,” he said. “We are not the world’s experts, but have an open mind and we will partner with people who do know how.” Dish has signed master lease agreements with tower companies and is partnering with companies in the wireless infrastructure industry to do permitting, RF planning and design of the network.
5G Broadband Network Build
When the narrowband IoT network is built, Ergen will shift his focus to the 5G network, which he said will cost $10 billion to build. He believes his timing is just right. Dish will use just under 100 megahertz, combining low-band 600 MHz and mid-band spectrum at 2 GHz, for the network. The 600 MHz spectrum will not be cleared until July of 2020, the same year 3GPP will complete the 5G standard.
Ergen said he will use additional spectrum that comes on the market, conceivably millimeter wave, for the small cell component.
“We don’t think it is the right thing to do to use the same frequencies for small cells that we do in macrocells, because there are interference issues there,” he said.
Additionally, Dish has been pushing the FCC to include the Multichannel Video Distribution and Data Service (MVDDS) spectrum in the 12.2 to 12.7 GHz band in the 5G Spectrum Frontiers allocation. That is 500 megahertz of spectrum and will be easy to repurpose, according to Ergen, because it has only two incumbents: DirecTV and Dish Network.
What Did We Learn?
Charlie’s plain-spoken style belies his closet-to-the-vest approach to discussing his company’s plans. He is at once self deprecating and confident. We learned a little more about the timeline for the narrowband IoT network buildout. He spoke a lot about partnerships but divulged none of them. His apparent seat-of-the-pants, startup approach, however, may be a perfect fit for the 5G.
Ergen has the heart of an entrepreneur and he compared building out 5G to the challenges he faced revolutionizing the satellite industry. “Adventure,” he said, is part of his corporate culture.
“We have two disadvantages; We don’t [have many] customers and we are not as knowledgeable as other people in the business, but we don’t have the legacy of 2G, 3G, 4G switch networks. We have a clean sheet of paper with 5G,” he said. “It reminds me of 1990 when we decided to reinvent ourselves from the big dish business to small dish. It took 5 years to design and build that system with not one penny of revenue, and we obsoleted the business we were in.
“When we got into satellites, we didn’t know anything about it, but neither did anyone else. It is the same with 5G/IoT. We are not the world’s experts, but neither is anyone else,” Ergen added.
J. Sharpe Smith
J. Sharpe Smith joined AGL in 2007 as contributing editor to the magazine and as editor of eDigest email newsletter. He has 27 years of experience writing about industrial communications, paging, cellular, small cells, DAS and towers. Previously, he worked for the Enterprise Wireless Alliance as editor of the Enterprise Wireless Magazine. Before that, he edited the Wireless Journal for CTIA and he began his wireless journalism career with Phillips Publishing, now Access Intelligence. Sharpe Smith may be contacted at: [email protected].
Wireless carrier consolidation and the accompanied jitters it inspires will be one of the top stories again in 2014.
As we headed in to the holiday break, the Wall Street Journal reported on Dec. 13 that Sprint was considering a merger with T-Mobile US, which set the industry into full speculation mode.
If such a merger would occur, Jennifer M. Fritzsche, senior analyst, Wells Fargo wrote, it would have the biggest impact on Crown Castle International, which has an overlap between T-Mobile US and Sprint totaling 8,000 sites, which accounts for 20 percent of its U.S. portfolio and 10 percent of its consolidated site rental revenues, according to Fritzsche. SBA Communications would be the least affected with an overlap of 2,000 sites or 13 percent of its domestic portfolio. American Tower has an overlap on 5,500 sites, which 20 percent of its domestic portfolio, but it accounts for less than 5 percent of its revenue.
Average remaining term of leases on affected sites at all of the big three tower companies is seven years.
“We would be affected very little by the combo of Sprint and T-Mobile US in terms of existing overlap, however it would affect our growth model and likely pricing on exit as I think initially the entire market would trade down,” said Ronald G. Bizick, II, CEO, Tarpon Towers.
The Nikkei Asian Review reported on Dec. 25 that Sprint’s owner, SoftBank, was in the final stages of talks with Deutsche Telekom to purchase the majority of shares in T-Mobile US for $19 billion. SoftBank has approached Credit Suisse, Mizuho Bank, Goldman Sachs and Deutsche Bank, looking for funding, according to Bloomberg News.
And then there are the antitrust and competition concerns of two major carriers merging. Not forgotten is AT&T’s $39 billion merger proposal for T-Mobile US in 2011 that was nixed by the Department of Justice. Worries caused by that deal stifled growth in cell site development for the better part of that year.
A Sprint/T-Mobile US merger would create a super carrier with 100 million subs, making it competitive with the current duopoly, AT&T and Verizon. The combo would also make Softbank the second largest carrier in the world behind China Mobile. Whether the deal goes through depends in part on whether it is seen by the FCC and DoJ as improving competition or harming it.
Another issue might be timing of the merger, according to Mobile Ecosystem analyst Mark Lowenstein. “[Softbank’s] Masayoshi Son’s already uphill battle [to merge with T-Mobile US] has become progressively steeper given T-Mobile’s 2013 trifecta of successful Metro integration/expansion, rapid LTE deployment, and success with its ‘un-carrier’ strategy,” he wrote. “AT&T’s planned acquisition of Leap will put further pressure on Sprint MVNOs. Plus, the incentive auctions have been delayed into 2015, pushing commercial reality of additional sub-2.5 GHz spectrum for Sprint even further out.”
To make matters even more complicated, Charlie Ergen, the driver of much of last year’s merger melodramas, has decided he may want to poke in his nose. Reuters reported on Dec. 18 that DISH Network was considering its own bid for T-Mobile US, pitting it against Sprint, the carrier it used to want to buy.
It’s easy to find people that don’t trust DISH Network’s Charlie Ergen, but it’s hard not to get titillated by some of the technology plays that he brings to Sprint and Clearwire. To Sprint, he brings a multimedia package – mobile and fixed video, voice, and data. Additionally, his company brings a fixed-broadband wireless play using spectrum in the 2.5 GHz band, which would complement the spectrum holdings of both Sprint and Clearwire.
The week, DISH and nTelos Wireless, a rural wireless provider, announced the commencement of a fixed broadband wireless test in rural Virginia using LTE technology, with speeds ranging from 20 Mbps to more than 50 Mbps.
As part of the demonstration, two wireless tower test sites were activated in the Blue Ridge Mountains near Waynesboro and Afton, Va. BandRich ruggedized outdoor routers with built-in high-gain antennas were installed on the roofs of the homes to receive the signal. Ericsson and Alcatel-Lucent provided equipment and assisted in the installation.
The final story has yet to be written of the DISH/Sprint/Clearwire/Softbank merger-palooza. But with a significant portion of households in rural America underserved by wireline broadband, a fixed wireless LTE solution just might find a home in the country, no matter who provides it.