Ergen hazy on Dish-AWS deal financials, 5G buildout costs
Dish Network's Charlie Ergen continued to trumpet the 5G network his company is building, and the overall wireless opportunity the company hopes to tap into.
And Ergen's comments during Dish's earnings conference call Thursday were particularly timely considering Dish just last week announced a major new agreement with Amazon Web Services (AWS) that helped to boost the company's stock from around $36 per share immediately before the deal to around $42 per share afterwards. Dish's stock rose around 7% above that after the release of its earnings Thursday.
However, Ergen largely avoided providing any financial specifics regarding Dish's deal with AWS or its overall plan to build a nationwide 5G network to directly compete with the likes of T-Mobile, Verizon and AT&T.
"We're building Netflix in a Blockbuster world," Ergen said of Dish's 5G network. "It's a dramatic paradigm shift in the way a network is built."
"We're already engaged with a number of customers today," added Stephen Bye, EVP and chief commercial officer of Dish's wireless network business.
Ergen also reiterated Dish's plan to spend up to $10 billion on its overall 5G ambitions – and he provided a bit more clarity about how the company might reach that figure.
"All of that $10 billion isn't spent by June of 2023, which is our major milestone," Ergen said, pointing to the company's agreement with the US government to cover at least 70% of the US population with 5G no later than June 14, 2023. He said the $10 billion figure "does take us through the complete buildout."
Ergen also suggested Dish might ask the government for a bit more time for the buildout, given some companies' troubles obtaining electronics due to the global chipset shortage. "The timelines could be adjusted...We're not going to let anything stop us," he said.
As for Dish's new deal with AWS, Ergen suggested it could eventually grow into a major partnership between the two companies. "I think we're going to be their largest customer in cloud, and I think they may be the largest customer in our network. But we have to build a network and prove it, and they have to build it and prove it," he said.
Dish said last week it plans to run all of its network computing functions inside the public AWS cloud – a plan that represents a dramatic break from the way most 5G networks around the world run today.
However, Ergen and other Dish executives declined to provide any details regarding the financial details of the companies' transaction, including whether AWS was providing any financing to Dish.
"We're not quite there yet," Ergen said in response to questions about Dish's overall 5G financial model. "We're a bit conceptual."
He added: "We do have execution risk ... Some stuff is not going to work" in the early days of the network buildout.
Ergen and other Dish executives did provide a few insights into Dish's deal with AWS. They said that the AWS network today will be able to handle Dish's initial 5G networking needs, adding that Dish expects to be able to provide latency speeds roughly comparable to today's 4G networks as a result. But they also noted that the companies might construct new AWS computing nodes in select geographic locations in order to deliver lower latency speeds, based on customer demand.
Silicon, CBRS and T-Mobile
In terms of the chipset suppliers Dish will use for its network, Chief Network Officer Marc Rouanne said the company initially will use Intel's FlexRAN silicon. He said the company may add silicon from Qualcomm and AWS for small cells and other new radio designs as its network buildout progresses.
And Dish's Bye said the company is currently working to develop a new generation of radios that would support the company's 3.5GHz CBRS spectrum holdings. Dish's first batch of radios, from vendors MTI and Fujitsu, will only support the company's AWS-4, 700MHz and AWS H Block spectrum licenses.
Overall, Dish reported that its retail wireless subscriber base decreased by 161,000 in the first quarter, leaving the company with 8.89 million retail wireless subscribers in the first quarter.
Finally, Dish's Ergen again addressed T-Mobile's plans to shutter the CDMA network being used by an unspecified portion of Dish's Boost Mobile customers. Ergen reiterated Dish's desire for T-Mobile to maintain the network throughout 2022, and he called T-Mobile CEO Mike Sievert a "magenta grinch" because of his plans to turn off the network in January of next year.
"The 'uncarrier' has become the uncaring carrier," Ergen added.
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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano