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.”
Dish has previously announced MLAs with Crown Castle International, SBA Communications, Vertical Bridge, Harmoni Towers, Mobilitie, Parallel Infrastructure, Phoenix Tower International, Tillman Infrastructure, Tower Ventures and Vogue Towers.
Dave Mayo, Dish’s executive vice president of network development, said through the American Tower agreement the carrier may lease space on up to 20,000 American Tower communications sites to support its nationwide 5G network deployment.
“Our team has already developed colocation plans for American Tower sites across the country to bring a new generation of connectivity to Americans,” he said.
Under the agreement, cash lease payments from Dish to American Tower will commence in 2022 and grow over time as Dish’s network deployment progresses. In addition, Dish may lease shared generators from American Tower on select sites and will have the ability to use American Tower’s zoning, permitting and other pre-construction services.
“We look forward to this agreement evolving into a long-term, mutually beneficial strategic partnership,” said Steve Vondran, American Tower’s executive vice president and president, U.S. Tower Division. “We believe that our nationwide portfolio of communications sites is optimally positioned to continue to serve as the backbone of today’s critical mobile broadband networks while assuring a meaningful share of new leasing activity in the marketplace.”
Back in July 2019, Dish agreed to acquire Sprint’s prepaid businesses and customers, including Boost Mobile, Virgin Mobile and the Sprint-branded prepaid service, as a part of the merger agreement of Sprint and T-Mobile, which was under scrutiny by the U.S. Department of Justice. At that time, Dish also agreed to become a national facilities-based wireless carrier, deploy the nation’s first standalone 5G broadband network.
Dish Buys Republic Wireless
In a separate deal, Dish Network acquired Republic Wireless, an MVNO service operating on the T-Mobile network. Upon close, DISH will assume 200,000 customers, the Republic Wireless brand and other supporting assets.
After the acquisition closes, the existing Relay division of Republic Wireless will continue to operate as a standalone company and will become a wholesale customer on Dish’s 5G network. Relay provides communication and productivity solutions for frontline teams in hospitality, facilities management, manufacturing, healthcare and education, and will remain headquartered in Raleigh, NC.
Dish Network and Vertical Bridge REIT have reached a long-term agreement granting Dish access to Vertical Bridge’s portfolio of towers, rooftops, utility transmission structures, billboards, convenience stores and other sites used for wireless infrastructure deployment. Vertical Bridge has a portfolio of more than 300,000 sites in 50 states and Puerto Rico.
“Building a national 5G network requires an extensive presence across urban, suburban and rural areas, and Vertical Bridge’s portfolio offers Dish the array of coverage that we need,” said Dave Mayo, Dish executive vice president of network development. “As we continue to deploy Dish’s 5G network, Vertical Bridge’s assets, experience and commitment make them an invaluable partner.”
Alex Gellman, CEO and cofounder of Vertical Bridge, said that the tower company is committed to assisting Dish in its effort to build “a truly unique” 5G network. Just a couple days after the signing of the lease agreement, Dish had already begun signing lease agreements.
“It’s nice to get this important step behind us, so that we can really get to work on identifying sites, vetting them, leasing them and helping them get them built,” Gellman said.
In 2020, Dish became a nationwide U.S. wireless carrier through the acquisition of Boost Mobile. The company is building a cloud-native, Open RAN-based 5G broadband network. Now it is under pressure to build out a 5G network before FCC deadlines that require it to use its spectrum.
It is the second tower leasing agreement that Dish has signed. Crown Castle announced a long-term agreement with Dish last November through which the tower company will lease Dish space on up to 20,000 cell towers. Gellman said he believed Dish was drawn by the fact that Vertical Bridge is the largest private tower company and growing quickly, as well as the relationships developed over the years.
Vertical Bridge added more the 1,000 owned towers to its portfolio in 2020, including those from its acquisition of towers from Cumulus Media, its merger with Eco-Site and with newly built towers.
“Dave Mayo and I have known each other for a long time, since back when he was with T-Mobile and I was with Global Tower Partners. And a lot of his staff are known to us at Vertical Bridge,” Gellman said. “We are growing really fast. We are private, so we can be pretty flexible on some things that help them get going.”
One point of flexibility is amendments. With Vertical Bridge, the carrier can install whatever equipment it likes on a RAD center within certain wind loading criteria, as opposed to paying for each amendment to the tower.
“Bucket loading, to me, makes more sense, because it’s a real estate structure. It’s more of a square-footage play,” Gellman said. “We’re a real estate company. Our job is to deploy capital, buying and building assets, and then renting them to customers who are healthy and are happy being there. So, I don’t mind at all, a structure that allows tenants to operate efficiently in the space. It’s easy for them, and that’s good for me.”
Gellman admitted that Dish has a “gargantuan” task when it comes to building out a nationwide 5G network from scratch. He said that Vertical Bridge’s philosophy of being “fast, flexible and friendly” will help the carrier move quickly.
“We respond very, very quickly and are cognizant of how important timeliness is for them, which is important for any of our customers but especially for Dish,” Gellman said. We must be flexible with what they need so that we can help them get things done, and then the friendly part is, really, to keep an open line of communication so that we can deal with whatever may come along.”
After their company was acquired by Vertical Bridge, Eco-Site’s co-founders Dale Carey, Bob Glosson and Rich Stern joined the tower company’s executive team. Carey serves as executive vice president of strategy and convergence. Glosson is senior vice president of real estate solutions, and Stern is senior vice president of real estate.
“The other thing that’s really beneficial for us is, with the recently completed merger with Eco-Site, we added a lot of talent to our team,” Gellman said. “So we’re in a good position to really bear-hug the Dish opportunity and really apply a lot of resources to it.”
Gellman doesn’t believe the Dish agreement will result in a lot of growth for his company in 2021. “This year they’re going to be identifying and doing a lot of work on leasing sites,” he said. “I don’t think their rent will commence for until next year. So I think it’s going to be a build over time in terms of the impact on our income statement.”
Mid-year 2022 is Dish’s deadline to cover 20 percent of the population. A year later, mid-year 2013, that coverage requirement jumps to 70 percent, but Dish can get an extension if it reaches 50 percent population coverage.
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.