Dish Network's Charlie Ergen is poised to become a major new face in the 5G market.

Dish amassed a giant trove of spectrum over the past decade, and the company early last year announced plans to eventually put that spectrum to use in a 5G network. Dish's 5G plans moved into overdrive this week with the company's $5 billion agreement with the Department of Justice to acquire spectrum, customers and an MVNO arrangement from the combination of Sprint and T-Mobile.

As part of that agreement, Dish promised to build a 5G network that will cover 70% of the US population by June 2023 with speeds of at least 35Mbit/s.

In an one-on-one interview with Light Reading, Ergen and Dish's EVP Tom Cullen opened up about the transaction, the opposition it faces, the vendors that Dish might use for 5G, and what the company's new 5G strategy is.

The below transcript has been edited for clarity and brevity.

Light Reading: More than a dozen states plan to push forward with a lawsuit against the merger of Sprint and T-Mobile. What do you think about that, and how might that play out?

Charlie Ergen: I think we have some empathy for why the states have sued, because nobody was against this merger -- as constructed, from four to three -- more than Dish was. Right? So, obviously, the remedy that the FCC and Justice Department worked out was to make sure that it doesn't go from four to three but stays in four to four. Now, Dish to some degree may be the beneficiary of that, but Dish was well positioned to be a fourth competitor -- we always planned to be a fourth competitor in the industry. But, because of the [new] consent decree, we're able to enter the marketplace in a much more timely, economical fashion, and a much more competitive fashion, so we can be a fourth competitor early on. And so we think with those structural changes that in fact we're confident that we can compete, and that the marketplace actually will be even more competitive than it probably would have been had the merger been denied.

The states obviously have to do their homework on what Justice did. It's been noticed by people that the states that opposed today are all Democratic states. Obviously it's one of the obstacles to the consummation of the merger of Sprint and T-Mobile. We're open for any questions that the states would have. We certainly would be available for trial, if it goes there. Obviously we believe, with the way the merger is now construed, with the agreements we now have with Sprint and T-Mobile, it allows us to be a formidable new entrant in the marketplace and compete. And we think that, for the consumer, that's the best of both worlds.

There's one more aspect that would have never happened if the merger wasn't allowed: That's that both T-Mobile and Dish have agreed to conditions to promote eSIM. The incumbent carriers were fighting eSIM because it allows consumers to switch carriers on their phone without having to trade out a physical SIM or go to the store to do it. You can actually do it with a software download.

And so now consumers in the future will be able to not only port their phone number, but they'll be able to port their hardware. And that's gonna create a lot of competition in the marketplace. But it's particularly good for a new entrant because we don't have a lot of customers. In fact, we're only going to have 2% of the customers in the United States. So we have a lot more to gain than we do to lose.

Tom Cullen: One other aspect that I'm not sure many of the analysts have picked up on yet is that this is not a plain-vanilla MVNO agreement. It's an MVNO agreement that migrates to an infrastructure MVNO agreement, which allows us to then move to an MNO on our own. And the reason that's important is, we'll deploy a converged core where we'll be provisioning the SIM and the network ID and the subscriber information on our database. Whereas in a traditional MVNO, it's on the host database. That's important for many reasons, but it also allows for seamless transfer of traffic from areas that we build out onto the T-Mobile network nationwide. They'll seamlessly transfer, including both 4G and 5G, out of T-Mobile.

As we build out areas, our cost to generate a Gig will be much lower than anyone else's, because we're doing it in 5G. So we'll have owner economics, which improves the ability to fund further development and deployment.

Light Reading: What about the NB-IoT network that Dish has been building? Has that work been suspended based on this new deal?

Ergen: Assuming the FCC approves this transaction, which still has to be done, then we will suspend work on the NB-IoT and start to convert that to the 5G stand-alone.

Light Reading: How are you going to pay for the construction of this 5G network?

Ergen: Well, first of all, we've got almost $3 billion in our balance sheet today. Second would be that the marketplace -- poor Tom -- every banker, private equity, have reached out to say that they have money available. So the marketplace is pretty robust with capital today. A good business plan can raise money, right? And we think we have not only a good business plan but a great business plan.

Secondly, the 600MHz good-faith negotiations [with T-Mobile] is potentially a source of capital to Dish.

And third, we continue to generate over $1.5 billion in our core business, in cash, every year.

So there'll be questions about funding, but I don't think that that is something that's going to keep us up at night.

Light Reading: When you first started talking about 5G, you talked about the opportunity beyond phones, like the Internet of things. Is that still your focus now, considering you're gaining almost 10 million phone customers from Sprint?

Ergen: With four carriers in the marketplace, and starting from scratch, it would have been a bit difficult to generate a lot of phone customers. We thought we would get some of that, but that wouldn't be our primary focus. Now, with the jumpstart with 9.3 million customers, and access to the T-Mobile network on a national basis, phone will certainly be a short-term focus, added to our business plans from where we thought we were gonna go. We believe with the MVNO deal and the ability to build our own network, on a city-by-city basis, that we'll be very competitive in the consumer handset business.

So that will be a big slice of our network.

Having said that, we have enough spectrum capacity today that we also will be able to have parts of our network that do exactly what we've talked about, whether it be the Internet of things, whether it be smart cities, utilities, whether it be industrial production or robotics with the precision agriculture. All those things need a piece of a network. And we will have capacity to do that.

Just to give you an example, we have more downlink spectrum today in low and midband than Verizon, right? They have 120, 140 million customers in their network and their network is 2G, 3G and 4G. So we're going to be able to build a 5G network which is more efficient. And even if we used half our bandwidth, we could put more than 100 million customers on our network. I don't think anybody realistically thinks we're going to get 100 million customers in the next few years, but we will be able to walk and chew gum at the same time.

But it is a new business for us that we didn't anticipate, so that's good news for us.

Light Reading: What vendors are you considering for 5G? You've pointed to Rakuten in Japan and Reliance Jio in India as operators using new vendors and new technologies that Dish might emulate. So, in terms of equipment, are you looking at the regular 5G players or other options as well?

Cullen: It's probably a little premature to comment on that. But we will be issuing an RFI and an RFP probably next week. We'll be casting a pretty wide net because, in a 5G world with open interfaces, you have a much broader vendor community to speak to, just like you're seeing with Rakuten and Jio. That doesn't mean the traditional vendors won't be part of it, but we intend to talk to a lot of people because it includes things like mobile edge computing and cloud infrastructure and transport vendors. So it goes beyond just the traditional core and RAN.

Ergen: But we do think it brings into play American vendors that have been left out of the traditional networks. In fact, I'm unaware of any operator today that uses any equipment from US vendors. It's all European or Chinese or Korean.

Nobody writes better software than in the United States, and most of our network will be software. So we know we'll have a much more American-centric set of vendors than the traditional incumbents.

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano