DISH Wireless and AT&T reached an agreement that will provide DISH’s mobile virtual network operators (MVNOs) with coverage for the next decade with a two-year transition period on top of it. This is a great move as DISH Wireless owns Boost Mobile, Ting Mobile, and Republic Wireless for a total of nearly 10 million subscribers. A large majority of these subscribers are a part of the Boost Mobile network, which was facing a serious issue with T-Mobile.
The problem for DISH Wireless, Boost Mobile, and its customers is that the CDMA network that many Boost subscribers connect to is set to shut down. Since T-Mobile merged with Sprint, it also became in control of its CDMA network. The Un-carrier is set to shut down the network in January 2022, which could disrupt millions of subscribers for Boost Mobile, but now that DISH Wireless and AT&T have struck a deal, a resolution appears to have been formed.
But there is more to the DISH/AT&T story than this agreement, and it is impossible to look towards the future without remembering the past. In 2007, Charlie Ergen, the Founder of DISH Network, was very close to selling his company to AT&T. The deal fell through at the midnight hour when Ergen looked to change some of the terms. Fast forward to 2015, and AT&T would complete a multi-billion dollar acquisition of DirecTV. It never did quite work out and AT&T has already begun selling parts of the company. With 30% of its stake gone, AT&T is divesting from the decision and focusing on its wireless endeavors.
All of these moves have set the stage for DISH Network and AT&T to revisit a merger. It is unlikely to happen overnight, but by working together to provide coverage to subscribers as DISH Wireless continues to build its 5G network, their relationship grows that much closer. Things may or may not have needed mending after the failed merger, but times are different, as are the executives.
Each company is looking to advance in a new world of entertainment. Traditional pay-TV is paying attention to how streaming continues to change the way consumers watch their favorite shows and movies. By working together, both parties will be providing the other with appropriate synergies that are helpful and could cut costs should a merger be completed. According to Jonathan Chaplin, an analyst at New Street Research, DISH Wireless gains the support it needs from AT&T while it continues to build. Although AT&T is helping one of its competitors, access to DISH’s spectrum can also help them from a competitive standpoint.
5G takes time and investment to deploy. There are plenty of innovative features which DISH continues to push to create a better, cost-effective 5G network; however, it is still going to take some time to cover many of the rural markets in America. This is a huge target for DISH Wireless as the company continues to place value in these underserved markets. The agreement with AT&T, which will last longer than the T-Mobile agreement set to expire in 2027, will help DISH focus on urban markets while still reaching rural areas.
Source: CNBC
