Dish Chairman Rules Out More Spectrum Buys
Dish's 45MHz of spectrum (40MHz of it coming from recent acquisitions of TerreStar Networks and DBSD North America Inc.) should be plenty to get its own wireless service off the launch pad, Chairman Charlie Ergen insisted Monday during the company's first-quarter earnings call. (See Dish Serves Up Q1 Subscriber Surprise .)
But Dish's long-term plan is in a holding pattern while the Federal Communications Commission (FCC) considers a rulemaking that would let the company use its Mobile-Satellite Services (MSS) spectrum for terrestrial-only services and avoid having to support satellite link-ups. (See Dish Stashing Cash for Its 4G Run and FCC Keeps Dish Spectrum Plan Alive .)
Ergen is hopeful that the FCC will make its rulemaking by the end of the summer, and is generally unworried that his spectrum will run into the interference issues that have stymied LightSquared . (See LightSquared Director Considers Bankruptcy.)
In the meantime, Dish is moving ahead on a second-generation dual-mode handset that aims to jump-start the S-band ecosystem and support both terrestrial and satellite links, just in case the FCC doesn't give Dish the flexibility it wants. Ergen promised some news about that in the next couple weeks, noting that Dish would like work with the FCC on a "reasonable" build out schedule that would allow Dish more time to develop its S-band technology.
Investors worry that a network buildout could cost up to $10 billion, but Ergen promised "to be conservative on how we enter the wireless business. ... I'm happy to spend $10 billion if we can get a 50 percent return on it every year."
Ergen did admit that it could take Dish four years to build a wireless network from scratch, but he sees that as an unlikely scenario. He'd like to get into the market faster by having Dish partner with another wireless provider that needs more capacity for Long Term Evolution (LTE) and might also have some mobile video ambitions. AT&T Inc. (NYSE: T) and T-Mobile US Inc. are among the speculated candidates for that sort of set-up. Or Dish could end up selling its spectrum assets if the FCC lets the ruling drag on. (See Will AT&T Gun for Dish? )
Ergen's hopeful that Dish can avoid either extreme (i.e., building everything on its own or punting and selling its spectrum). He'd rather go with something in between and find partners that have access to towers, spectrum and handsets. "We're comfortable with where we are strategically no matter what happens in the marketplace," Ergen said.
— Jeff Baumgartner, Site Editor, Light Reading Cable