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Will Dish move into 'phase 2' of its 5G buildout?

Dish Network is required by the US government to cover 20% of the US population with 5G by June 14, 2022. And, according to a number of indications, the company is well on its way toward meeting that goal.

However, if Dish successfully reaches that FCC-mandated 5G buildout target, will it continue expanding its network throughout 2022 and 2023?

At least one analyst firm believes the answer is a tentative "yes."

"We believe Dish is showing early indications that it will continue to be active working on phase II of its build in 2022," wrote the financial analysts at Cowen in a recent note to investors. And that's important, according to the analysts, because it could ultimately expand Dish's 5G network from around 15,000 cell sites to more than 40,000 cell sites.

Deadlines and more deadlines

Dish's 5G efforts stem from the company's 2019 agreement with T-Mobile and the US Department of Justice. That agreement, which positioned Dish to become the nation's fourth nationwide 5G provider, included a number of specific 5G coverage goals.

However, the FCC in 2020 issued an order that modified and extended Dish's spectrum buildout deadlines. The company still must cover 20% of the US population by June 14, 2022, using most of its spectrum licenses, but if it reaches 50% coverage by June 14, 2023, then some of its broader coverage goals can be pushed out by a few years.

Dish's new 5G coverage targets - listed by the geographic EA (Economic Area) and PEA (Partial Economic Area) breakdowns of its spectrum licenses - vary based on the type of spectrum it will use. Click here for a larger version of this image. (Source: Raymond James)
Dish's new 5G coverage targets – listed by the geographic EA (Economic Area) and PEA (Partial Economic Area) breakdowns of its spectrum licenses – vary based on the type of spectrum it will use. Click here for a larger version of this image.
(Source: Raymond James)

If Dish fails to meet its coverage goals – including the new ones issued in 2020 – it could lose its spectrum licenses and pay up to $2.2 billion in penalties.

To be clear, none of Dish's recent spectrum purchases – including the $7.3 billion it spent on spectrum licenses between 3.45GHz and 3.55GHz – are included in those FCC-mandated buildout goals.

Spending and more spending

Dish spent $281 million on its open RAN 5G network buildout during its recent third quarter. The company expects to increase that spending through the first quarter of 2022. Thereafter, Dish network chief Dave Mayo expects the company's capital expenses to reach a "steady state" and flatten out until 2023.

Already the financial analysts at Raymond James estimate that Dish has installed its 5G radios atop around 1,000 cell towers across the country via agreements with the likes of Crown Castle, American Tower and other cell tower owners. At least 100 of those towers are located in Las Vegas, according to estimates, though Dish missed its initial goal of launching commercial 5G services in that city by the end of last year.

Dish has installed a number of cell towers around the country. (Source: Dish)
Dish has installed a number of cell towers around the country.
(Source: Dish)

The analysts from Cowen estimate Dish will need to install radios on top of around 15,000 cell towers to cover 20% of the population. To cover the entire country, it likely would need around 40,000 cell sites. To put that into perspective, the analysts from Raymond James estimate Verizon has around 68,000 cell sites and AT&T has around 70,000 cell sites. T-Mobile expects to complete its network buildout program with around 85,000 cell sites.

And Dish's interest in adding more cell sites is clear. Indeed, Dish founder Charlie Ergen is scheduled to speak at the upcoming NATE Unite 2022 trade show in February in Las Vegas. The annual event is specifically intended for cell tower technicians, the engineers who physically install equipment on top of towers.

"NATE Unite 2022 being held in Las Vegas is well-timed to coincide with Dish preparing to activate service and make the city its first official 5G wireless market during the first quarter of 2022," NATE CEO Todd Schlekeway said in a statement.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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