A top industry analyst has slapped a "sell" rating on Dish Network as it's becoming increasingly clear that the possibility of a spectrum sale is fleeting, as the company instead moves ahead with an expensive network build-out plan.

Craig Moffett, analyst with MoffettNathanson, downgraded Dish Network LLC (Nasdaq: DISH) shares from "neutral" to sell and cut its target price on the stock to $29 (from $37) on the notion that a spectrum sale for Dish is the only good outcome on the company's "bewilderingly complex" decision tree, which also includes a range of network buildout scenarios.

"A spectrum sale (and at a price above that which is already implied in Dish's stock price) is the ONLY positive scenario for the stock," Moffett wrote in a research note issued Monday. "Whether by choice or by necessity, it now appears Dish has no alternative but to build a network."

Dish, meanwhile, has been adamant that selling spectrum is not currently an option that's on the table.

Though analysts like to discuss that option, "I don't think you've heard me talk much about selling spectrum ever," Charlie Ergen, Dish's chairman, said on last week's call.

Ergen instead stressed that 5G is critical to Dish's long-term future. Dish is also confident that it can meet its buildout commitment and have the first phase of a 5G-capable network, initially focused on narrowband Internet of Things services, by March 2020. (See Dish: We Can Meet Wireless Buildout Schedule.)

And even if Dish were to change its tune, it's too late to pursue a spectrum sale, the analyst held, estimating that Dish's spectrum holdings are valued at about $1 per MHz-POP.

"For all intents and purposes, the window for a spectrum sale before Dish's March 2020 AWS-4 buildout deadline has already closed," Moffett wrote.

That's because there's not enough time for a buyer to clear the regulatory hurdles, which would include an FCC public interest review that could take nine months or more, and still meet the buildout conditions.

There are also questions if Dish can even satisfy the buildout requirements to initially focus on a narrowband IoT network and then proceed with phase II and a much bigger 5G-powered broadband network. Dish has also acknowledged that there's no assurance that the FCC will find that its buildout plan, including the first phase, is sufficient to meet requirements.

Moffett puts the "market-to-market" valuation of Dish's spectrum at $26.4 billion (applicable in the event the spectrum is to be sold). He also holds that if Dish were to forfeit its most valuable spectrum band back to the FCC, its equity would, for all intents and purposes, be worth zero.

"This [the sale of spectrum] isn't just the best case scenario. It's the ONLY good scenario," the stressed.

And it's fleeting. While scenarios where Dish would be acquired in-full have dimmed, so has the belief that Verizon would be the most likely buyer for some or all of Dish's mid-band spectrum.

Verizon has since moved ahead with a densification strategy (rather than the acquisition of more spectrum) for its LTE network, and passed on the 600Mhz incentive auction as pursues the use of millimeter wave spectrum for the 5G network, the analyst noted.

Besides, Moffett said it's also not clear a sale of Dish's spectrum to Verizon Communications Inc. (NYSE: VZ) or even AT&T Inc. (NYSE: T) would be allowed given that the licenses were granted under the belief that they could create competition with incumbent carriers.

After gains last week aided by improved pay-TV numbers, Dish shares were holding steady on Monday, down just 1 cent to $35.16 each in afternoon trading.

— Jeff Baumgartner, Senior Editor, Light Reading