NEW ORLEANS – During a keynote discussion here at the Connect X trade show, Dish's networking chief Dave Mayo reiterated the company's plan to "pause" its 5G network buildout later this year.
The comments undoubtedly come as a letdown – though maybe not a surprise – to the cell tower owners in the Connect X crowd.
Figure 1: 
Mayo, right, discusses Dish's 5G network with John Celentano, of Inside Towers, at the Connect X trade show.
(Source: Mike Dano/Light Reading)
"We see the announcement of Dish's 'pause' on expansion capex as negative for tower stocks," wrote the financial analysts at KeyBanc Capital Markets in a recent note to investors.
Most of the nation's biggest cell tower owners – including American Tower, SBA Communications and Crown Castle – are leasing space on their towers to Dish. Broadly, they're hoping Dish is successful in the US wireless industry because they want to have more customers buying real estate on their tower holdings.
Earlier this week, during Dish's quarterly earnings call, Dish's Charlie Ergen first confirmed the company's plans to pause its open RAN 5G network buildout after it reaches its government-mandated 5G network buildout requirements in June 2023. He said the company would likely resume its efforts later in 2024 in order to meet its final government-mandated coverage target in June 2025.
A breather
Analysts generally argued the move is necessary.
"This helps Dish extend the time required to find additional funding and should also increase its options, but clearly a short-term negative for US tower leasing trends," wrote the financial analysts at Raymond James in a note to investors.
Dish believes it will need to broadcast its 5G signal from atop around 16,000 cell towers to reach its goal of covering 70% of the US population by June 2023. Dish's Mayo said the company has so far started construction on more than 18,000 5G cell sites, and expects to reach its coverage targets in June.
"It is unclear to us how much they will cut the pace of deployment," wrote the financial analysts at New Street Research in a recent note to investors. "For now, we are assuming a pace of 3,000 [cell towers] per quarter in 1H23, 2,000 per quarter in 2H23, and 1,000 per quarter in 2024. They could cut deployment more dramatically if they need to. We assume they ramp deployment again at the start of 2025."
The analysts believe Dish will need around 35,000 total cell towers to reach its final coverage target in June 2025, which requires the company to cover 75% of each of its spectrum license areas with 5G. That "will be tough," according to the New Street analysts.
During the pause
During his keynote session, Mayo said Dish will work to densify and improve its network after it reaches its June 2023 buildout target. Instead of expanding coverage to new markets, he said Dish would flesh out and improve the coverage in its existing footprint during the second half of 2023.
"We've got lots to do," he said.
Mayo said that densification would mostly rely on big, macro cell towers, but would also include some small cells. "We'll start deploying small cells later this year," he said.
After June, Mayo also said Dish would work to expand its 5G-based voice calling service. He said Voice over New Radio (VoNR) technology is available in some Dish markets, but he said the company would work to expand that across its footprint.
Finally, Mayo said Dish would also expand its Boost Infinite postpaid calling service across its footprint. He said the company is holding a meeting with its dealers later this week, and that it would introduce a new commission structure that would encourage Dish and Boost salespeople to get customers to buy phones that support the company's spectrum bands, including its Band 70 holdings. The company currently offers a handful of phones that support Band 70.
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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano
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