Dish 5G Deployment Like ‘Building Netflix in a Blockbuster World,’ Says Ergen
Dish Network will light up 5G in “some preliminary small markets” in 2021's first quarter, said Chairman Charlie Ergen on a Q3 investor call Friday. “It will be the third quarter before we have a major market up and running that the world can touch and feel a little bit,” he said. The disclosures set off a barrage of questions from analysts skeptical about Dish’s progress and its ability to meet its FCC obligations of bringing 5G to critical mass by June 2023.
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“We’re running pretty fast internally” on the 5G deployment, Ergen said. With “so much detail” in the 5G network buildout, “we strategically said we’re focused on just getting the job done,” he said. “There’s not great forums for us to communicate in the world of COVID for us to show you what we’re doing. You’ve really got to see it. It’s not a PowerPoint presentation.”
Ergen wants investors to “rest assured” that Dish is working to build a 5G “team,” he said. “We have to hire people whose best days are ahead of them.” It “takes a little longer” to find that talent, he said. Dish is pleased with the 5G vendors it’s working with, he said: “They’re taking a chance on us.” But with a successful 5G deployment, “we all take the approach that we’re going to help make their business better, and they’re committed to help make our business better.”
Dish is planning its 5G buildout “behind the scenes,” said Ergen. Though Dish wishes it had a supply of 5G radios available, “because we are ready to deploy in certain markets,” it’s “dependent” on open radio access network radios from Fujitsu, and those won’t arrive “in mass” until the second half of next year, he said. It will appear to Dish outsiders in 2021's second half “that we’re running pretty fast, but behind the scenes, we’re running fast now,” he said.
Ergen thinks Dish can win “our fair share” of the 5G consumer wireless market, he said, sidestepping requests to name a numerical percentage. “We look at businesses where we can build something that’s less expensive and better,” he said. With both, “you can be more successful in the marketplace.”
Dish’s 5G ORAN network will be “cloud-native,” based on 21st-century architecture, said Ergen. “That network can do things that other networks can’t do.” Dish will be able to “slice” its 5G offering, giving enterprise customers the opportunity to own a “private network,” he said. “That’s going to be relatively unique to Dish.” Ergen expects Dish will be “a factor in the consumer business and even a bigger factor in the private networks.”
ORAN network architecture makes Dish's 5G deployment analogous to “building Netflix in a Blockbuster world,” said Ergen. Blockbuster worked, but “it just seems pretty archaic that you went to a store and had to rewind the thing before you delivered it back." Dish once owned Blockbuster "and lost 100 million bucks on it," he said. "I’ll never do that again.” With 5G, “we’re building the next generation of where things go,” he said.
Ergen remains confident Dish will be able to raise the $10 billion it needs to fund the 5G buildout, he said. “It becomes a timing issue,” he said. Should Dish approach venture capitalists “with the amount of skepticism about what we’re doing, or do you go to market when there’s fewer skeptics?” Ergen concedes “we could fail” on 5G, he said. “But we don’t spend our time and effort for capital on things that are going to fail." Observers won't experience 5G developments "out loud from our company until we deploy major markets,” he said.
Other disclosures: (1) Ergen stands by his previous comments that a DirecTV-Dish merger deal is “inevitable,” whether it happens “a year from now or 10 years from now,” he said; DirecTV parent AT&T didn’t comment; (2) T-Mobile will lease a portion of Dish’s 600 MHz spectrum licenses for $56 million a year for a 42-month term under an agreement signed Sept. 11, said the Dish 10-Q Friday; (3) Dish TV had 87,000 net subscriber losses in Q3 vs. 66,000 net losses a year earlier. Sling TV had 203,000 net subscriber additions, compared with 214,000 net gains in the 2019 quarter. Dish had 9.42 million retail wireless subscribers when Q3 closed Sept. 30.