Dish Network confirmed that it won't have its 5G core network up and running by the end of 2020, a slight delay given its earlier projections.
"We'll have some preliminary, small markets in the first quarter [of 2021]," Dish chairman Charlie Ergen said Friday on the company's Q3 earnings call. In May, Ergen expressed hope that Dish would have a 5G network core up in at least one market this year.
Ergen expects Dish to have a 5G network up and running in a "major market" by Q3 2021. Meanwhile, Dish has activated its first 5G cell site in Dish's backyard of Littleton, Colorado.
"The big picture is we're running pretty fast internally," he said. "Strategically, we're focused on just getting the job done. "
5G buildout 'on track'
But this small change shouldn't impact Dish's plans to meet its 5G network buildouts with the FCC. Dish, is "on track" to achieve those, which include 20% coverage by June 2022 along with 70% coverage by June 2023 (with a minimum of 15,000 sites), said Stephen Bye, EVP and chief commercial officer of Dish's wireless network business.
"We're already well into the planning process," Bye said. "We aren't starting now. We actually started months and months ago on that process …We have a very healthy funnel and pipeline of sites we can deploy to achieve those objectives."
Dish's 5G network plans are ambitious in the mere fact that the company is tackling the development of virtualized, cloud-native, open RAN network. While delivering services to consumers on a retail channel fit into that plan, Dish views the anticipated network slicing capabilities of its 5G effort to be a big draw for private networks used by enterprises.
Ergen pointed out that open RAN radios from its initial supplier for those, Fujitsu, won't arrive in mass quantities until the second half of 2021.
"We can't climb the towers until we have the radios," he said. "In the meantime, it allows us to get our planning done, our permitting done," he said. "It will appear ... that in the second half of next year we're running pretty fast. Behind the scenes, we're running fast now."
$10 billion remains cost target
Ergen said Dish is still projecting a $10 billion capital spend for the national 5G network, but noted that the company's new MVNO business (via the acquisition of Boost from T-Mobile) will help to stretch that out that spend out – from an initial three years to five years.
And from this point on, Dish will break out its 5G network expenses for all to see. Dish spent $50 million on capital and operating expense on the project in Q3, expects similar levels in Q4 2020, and to increase substantially in the second half of 2021 as it ramps up the 5G network deployment.
"You're going to see every penny of that in our financials and how that's spent," Ergen promised.
Meanwhile, Dish's new MVNO business is bringing in revenue, though it lost 212,000 retail wireless subs in Q3, closing the quarter with about 9.42 million. Dish's wireless operation generated $79 million in EBIDTA from $1.08 billion in service revenue, which beat the expectations of analysts at New Street Research.
Margins of 5.9% for Dish's retail wireless segment were "slim," at 5.9%, and compares to typical margins in the realm of 10% for "a (very) well-run MVNO, like Tracfone," which is being acquired by Verizon, Craig Moffett, an analyst with MoffettNathanson, pointed out in a research note.
He wondered if Dish's margin results reflect inflated selling, general and administrative costs "as Dish gets its arm around a new business."
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— Jeff Baumgartner, Senior Editor, Light Reading