Dish hopes to serve a new type of 5G network

Charlie Ergen has had designs to go from TV to mobile mogul for years.

The multimillion-dollar media executive and former professional poker player has spent $ 25 billion over the past decade and a half including phone spectrum to transform Dish Network, its satellite pay-TV company, into a competing telephone company. with industry leaders AT&T, Verizon and T-Mobile. Eight years ago, it was even close to a $ 25 billion offer for Sprint, which was the third largest network at the time.

Earlier this year Dish announced its intention to be the first telecommunications company in the world to choose to manage its service from the public cloud afterwards. make a deal with Amazon use their servers to control a new 5G network.

If it works, it could prove the case for an entirely different type of telecommunications architecture.

According to Ergen, Dish’s transition into a telecommunications company is driven by “a paradigm shift in technology,” with cloud providers now able to accommodate all the servers and software capabilities needed to manage a network.

“This technology is critical. If you’re too early, you’re dead on the road but if you’re too late, you’ll miss the window, ”he told the Financial Times in an interview.

That coincides with government pressure on telecom companies in countries including the United States and the United Kingdom to deploy smaller device suppliers, after China’s Huawei was banned from launching new 5G networks for reasons security.

Dish works with Nokia but also a long list of US software companies, including Mavenir, Altiostar, Matrixx, Ciena and Palo Alto Networks, to provide a network that is considered a potential pioneer for ‘open RAN’ network around the world.

‘Open RAN’ represents a change that allows the hardware and telecommunications software of different vendors to work together, rather than relying on a large vendor like Huawei or Ericsson. This allows smaller and potentially innovative providers to enter the 5G market. It has been defended by the US and UK governments as a way to increase competition following Huawei’s ban.

If Dish proves that it can quickly implement a new 5G network at a much lower cost – because it won’t have to build and manage its own data centers – its launch could be a major event. “As long as we succeed, others will follow,” Ergen said.

Dish’s 5G network will go live in Las Vegas in the third quarter and began receiving registration requests from customers this month through a website called Project Gene5is, but there are many in the industry who remain skeptical that it will have much of an impact on an American telecommunications market dominated by the three largest groups.

The $ 8bn- $ 10bn budget to build a new wireless network seems meager to some. “You can get decent coverage in the middle of New Jersey for $ 10 billion,” said a leader of a rival telecommunications company who said the new 5G network is unlikely to be able to offer widespread coverage outside areas. urban for years. This reduces its appeal to consumers and business customers who need to travel.

Others have noted that Dish is moving into telecommunications only months after AT&T changed its foray into new markets, among other things. filendu the closest competitor to the satellite company DirecTV.

For some, wireless push is critical to Dish’s survival. Research group MoffettNathanson has argued that the core of Dish’s satellite television business is likely to report “lower levels” of new customers in the future.

Even if it’s just starting out, “Now it’s fair to say that Dish’s core business is wireless rather than satellite TV,” analysts said.

Ergen argues that he has seen out of doubt in the past. Nicknamed the most hated man in Hollywood because of his family battles of great bet with content companies has a fearsome reputation. He overtook Rupert Murdoch in 2001, taking advantage of his first attempts to buy DirecTV. Ergen was also active in Britain, where he surrounded the satellite rival Inmarsat but pulled out of the offer at the eleventh hour in 2018.

He has certainly been seen out of doubt in the past. His $ 60,000 EchoStar satellite TV start-up – launched in 1980 with the installation of “old-fashioned dishes” in rural America where reception was non-existent – put him off the ground.

The launch of consumer digital broadcasting services in 1996 under the brand name Dish (Digital Information Super Highway) transformed him into a serious media player and gave him a head start on cable companies in the market. of paid TV. Dish, now separated from EchoStar, has more than 11 million customers and generated $ 15.5 billion in revenues and a net profit of $ 1.8 billion in 2020.

Ergen has also pointed to those skeptics about his plans for heavy fines by the U.S. telecoms regulator – under conditions attached to its spectrum licenses – if he doesn’t build his mobile network to reach 40 percent of the U.S. population by June next year and 70 percent by 2023. He has already said that failing those regulatory steps would be “financial suicide” for the company.

Dish already has a small foothold in the mobile market, having bought the Boost brand from T-Mobile in 2020. Boost’s 9m customer base is less than a tenth of its biggest rivals, but Dish has already ruined its pens having accused T-Mobile of trying to “Contrast competition” after the larger company moved to shut down an old 3G network used by Boost earlier than expected.

Even with the power of Amazon behind him, Ergen doesn’t promise land. “As a fourth player we don’t believe we can conquer the world in the short run,” he said. He added that there is still a broad risk associated with launching a network structure that has not been tested before.

However, he believes his cloud-based network could redo his business. “We built Netflix in the Blockbuster world,” he said in his distinctive Tennesseean drawl. “This is not our first rodeo.”