As part of Dish Network's $1.4 billion agreement last week to purchase around 9 million Boost-branded mobile customers from T-Mobile, the company also quietly said it would purchase billions of dollars of additional spectrum.
Dish agreed to move forward on a previously announced plan to purchase 13.5MHz of 800MHz spectrum nationwide from T-Mobile for a whopping $3.6 billion. Based on the terms of the companies' agreement, Dish said it would potentially purchase the spectrum during 2023, and that T-Mobile might continue to use a portion of the spectrum until 2025.
The transaction might not actually happen, given that it's not scheduled to close for another three years and much can happen between now and then. That the companies last week reiterated their plans to go through with the deal only underscores the fact that Charlie Ergen – the chairman of Dish Network and a key architect of the company's 5G strategy – ostensibly has an utterly inexhaustible desire for spectrum.
After all, Ergen has already spent more than $20 billion on spectrum licenses over more than a decade, and Dish still has not yet put those licenses into widespread commercial use.
Moving toward 5G
Last week Dish made a splash with its official move into the wireless industry. The company agreed to become the nation's second-largest MVNO via its acquisition of 9 million prepaid customers from T-Mobile. Dish will manage those customers on T-Mobile's network while it begins building its own 5G network. Dish already has named Mavenir, Altiostar and Fujitsu as its initial 5G vendors.
But left unsaid in Dish's press release on the matter was its interest in acquiring even more spectrum (T-Mobile laid out the details of the pending transaction in an SEC filing). The spectrum acquisition is noteworthy considering Dish already owns roughly the same amount of lowband and midband spectrum as Verizon, the nation's largest wireless network operator in terms of customers.
Dish's planned acquisition of T-Mobile's 13.5MHz of 800MHz spectrum stems from its initial agreement with T-Mobile and the Department of Justice in 2019. In that deal, Dish essentially agreed to replace Sprint as the nation's fourth nationwide wireless network operator, thus bypassing the DoJ's antitrust concerns with the deal.
The licenses Dish is set to acquire from T-Mobile in 2023 cover nationwide lowband spectrum mainly used by Sprint. Following its merger with Sprint, T-Mobile is building a nationwide 5G network primarily using its 600MHz and 2.5GHz spectrum licenses. The lowband 800MHz licenses Dish is buying will be ideal for covering large geographic areas, but not necessarily for transmitting lots of data.
Ongoing spectrum interest
Despite Dish's agreement with T-Mobile and the DoJ in 2019 to enter the wireless industry and build a 5G network – and the more than $10 billion that effort will require – Dish's Ergen still isn't satisfied with his spectrum warchest.
Dish has already spent $216 million across three recent FCC auctions for millimeter wave spectrum. And Dish is among roughly 250 entities that have been approved to bid in the FCC's upcoming 3.5GHz CBRS auction.
Whether Dish intends to add valuable 3.7-4.2GHz C-band spectrum to its holdings remains to be seen. The FCC is scheduled to auction C-band spectrum in December; Verizon is widely expected to dominate that auction.