Dish Network may start looking for a way to delay its 5G network buildout requirements.
"We believe the most likely path forward for Dish near term is to negotiate an extension on its 2025 FCC coverage requirement after meeting its June 2023 deadline," wrote the financial analysts at Wells Fargo in a recent note to investors. "A 1-2 year extension would enable Dish to conserve, or at least delay, ~$2-3 billion of capital spending that would give it more runway to grow its consumer and enterprise subscriber base (while leveraging T-Mobile and AT&T's wholesale agreements for coverage)."
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(Source: Jonathan Weiss/Alamy Stock Photo)
Added the analysts: "The FCC also has a vested interest in making sure Dish remains a going concern. Not only would a Dish bankruptcy or liquidation be a major black eye for the FCC (which has auctioned over $30 billion to Dish), it would also eliminate the 4th carrier which the FCC desired as a condition of the Sprint/T-Mobile merger."
Dish officials declined to speculate on the topic. "Right now we're staying focused on our 70% milestone coming in June 2023," a Dish representative wrote in response to questions from Light Reading. "We'll share more around that when the time comes."
Mandates and requirements
Thanks to its 2019 agreement with T-Mobile and the US Department of Justice (DoJ) – an agreement that paved the way for T-Mobile to buy Sprint – Dish is required to cover 70% of the US population with its 5G network by June 2023. Company officials have said they expect to meet that requirement. Dish believes it will need to broadcast its 5G signal from atop roughly 16,000 cell towers to cover 70% of the US population – and already the company has started construction on more than 18,000 5G cell sites.
But Dish also faces another coverage requirement: Covering 75% of each of its spectrum license areas with 5G, by June 2025. Analysts believe Dish will need another 15,000 cell towers – and an additional $2 billion to $3 billion – to reach that goal. Dish – which is struggling financially – may not be able to easily raise the cash needed to reach its June 2025 coverage targets.
"The big debate is how they finance the build," noted the Wells Fargo analysts.
Dish's mobile customers are roaming onto AT&T and T-Mobile networks in places where Dish doesn't offer 5G.
According to New Street Research analyst Blair Levin, officials at the FCC might be open to granting Dish a waiver for its 2025 coverage targets. "I think the FCC would swallow hard," he wrote in response to questions from Light Reading. "But at the end of the day, grant it."
Levin explained that an extension to the 2025 coverage requirement "is far more likely to produce competition – the policy goal – sooner than taking the spectrum back, litigating, and then, depending on the results of the litigation, reauctioning and having someone else try to build out."
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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano