DISH’s $10 Billion 5G Buildout May Not Be Enough

Now that a federal judge has given the T-Mobile and Sprint merger the go ahead, it looks like DISH Network is set to become the fourth major wireless carrier in the United States. This is a big change for DISH, particularly because the company does not yet have its own 5G wireless network. To be fair, as part of the stipulations set forth by the Department of Justice (DOJ), DISH will have access to T-Mobile’s own wireless infrastructure for seven years. However, experts are skeptical that DISH will be able to get their own network up in the same timeframe, and on budget. Particularly given the fact that the DOJ mandated that DISH’s standalone network be substantial enough that it covers 20% of the U.S. population by 2022. DISH co-founder and Chairman, Charlie Ergen spoke at length about analysts’ concerns that $10 billion will not be enough during DISH’s Q4 earnings call. Ergen spoke about how DISH’s approach is “…a lot less expensive to build the network, a lot less expensive to operate the network, and with less people because of automation and the fact that our network is primarily going to be software in the cloud.” “In a modern architecture with automation we just need a lot less people to run the network,” Ergen continued. “When you have a clean sheet of paper and automation you can do that, so our costs are materially less.” If everything works out perfectly it is possible that DISH is able to deploy this on budget, but the reality is that’s very unlikely. Some of the technology that Ergen is talking about how yet to even hit the market. Which means DISH might have to sit on his hands for a while until the tech they need is available. All of that waiting can become a problem given that the company only has access to T-Mobile’s network for the next seven years. Given that DISH is looking to steal market share from other big carriers like Verizon and AT&T, it’s unlikely that any of those companies will allow DISH to lease network space from them if they needed it. DISH’s transition into the wireless carrier space is an exciting time for the company, but also a precarious one. DISH has a lot riding on the success of this venture, and there are certainly a lot of factors that could go wrong. This is a space worth keeping an eye on. Sources:

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