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Dish won’t have major 5G market up and running until Q3 of 2021

Dish Network is no longer expecting to have 5G running in a market by the end of this year. Instead, it expects to have its first major 5G market by the third quarter of 2021 as it waits to receive more radios from Fujitsu.

Dish will have some preliminary small markets in the first quarter of 2021, but it will be the third quarter before it has a major market up and running, Chairman and co-founder Charlie Ergen said during the company’s third-quarter conference call on Friday.

The company reiterated that it expects to meet the commitments it made to the FCC, which includes reaching 20% of the U.S. population by June 14, 2022, and at least 70% of the population by mid-2023.


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“We’re on track in terms of the deployment,” said Stephen Bye, EVP and chief commercial officer at Dish. It’s also evaluating sites from T-Mobile that it can re-use and some of those are included in the network design. “We’re on track to the 15,000 that we committed to as a minimum buildout requirement for June 2023.”

One tower already is up and running in Littleton, Colorado, where Dish activated its first 5G cell site, which was noted in a LinkedIn post by Dave Mayo, EVP/Network Deployment at Dish. SDxCentral earlier this week reported on Dish’s dashed hopes for a 5G network build in a single market this year.

Ergen said the team is running fast internally and getting a lot of work done, but it’s not always visible to investors and everybody on Wall Street – there are a lot of details and it’s not particularly easy to convey during Covid all of the work that’s going on. “You’ve really got to see it. It’s not a PowerPoint presentation,” he said.

Dish continues to build the wireless team and it’s hiring people in markets across the country to help deploy the network. The satellite TV company/wireless retailer is dependent on the open Radio Access Network (RAN) radios from Fujitsu, but they won’t arrive in a large amount until the second half of next year. In the meantime, they’re putting things in place to get ready.

In the big picture, Dish looks to build something at a lower cost but a higher quality. Because it’s cloud native and open RAN, its network will be able to do things that other networks can’t do, according to Ergen. Dish will get its fair share of the consumer business, but it’s also eyeing the enterprise space where it can offer what he describes as private networks.

Ergen was asked to explain how Dish expects to meet its buildout obligations when it will have only one major market up in the third quarter of next year.

He said the vast majority of the work is planning and acquiring the permits; the actual climbing of the tower and placement of gear is a relatively quick process.

In Dish’s favor: They’re building a very modern network using open RAN, so it’s not reliant on a single vendor – it’s working with many that are based in the U.S. Plus, the network is virtualized from the start, which is different from the incumbent operators, and it’s largely software rather than hardware.

Bye said they’re already well into the planning process and activities started months ago. “We’re in a very, very good position,” he said, noting the experience that he and Mayo acquired from previous technology deployments with other companies.  

The Fujitsu radios will arrive at scale later next year but they will take delivery of units before then and they’re very sophisticated radios, Bye said. The radios are configured such that they will allow Dish to support spectrum bands like CBRS as well as the spectrum licenses that Dish holds. The company is working with other radio vendors that it has not yet announced.

Where investors will get some visibility is with the tower companies, and Ergen said he’s got contracts on his desk. “There are still some issues. Some people want to be more of a partner than other people,” he said. However, “we can’t climb the towers until we have radios.”  

Dish still says its network will cost $10 billion – analysts have questioned that as being too low – and with its MVNO deal with T-Mobile, it doesn’t have to wait to build out its own network to monetize it. Dish has up to seven years to operate as an MVNO, and that $10 billion is stretched out over seven years rather than the three years it initially thought it had.

Ergen reiterated that they’re building a Netflix in a Blockbuster world. It’s not that Blockbuster didn’t work; it just seems very archaic now. “You’re talking to a guy who knows, because we owned it and lost a hundred million bucks on it… We’ve learned our lesson that we’re always going where the puck is going. We’re building the next generation of where things go.”

When the Department of Defense (DoD) put its RFI out, Dish responded with an offer for the DoD to use its network. Dish doesn’t believe the DoD should build its own network because it doesn’t need to; Dish is building the network that entities like the DoD can use. “Think of Fortune 500 companies who might have that same need,” he said. “Now use your imagination.”

Subscriber losses at Boost

While Dish builds out a national 5G network to operate as a fourth facilities-based service provider, it’s got its Boost Mobile business to operate. During the third quarter, the Boost business lost 212,000 subscribers, ending the quarter with a total of 9.42 million wireless subscribers. Dish said the losses were largely due to efforts to integrate its operations and make changes to enhance profitability.

Dish completed the acquisition of Boost on July 1, when it acquired more than 9 million customers. On August 1, it entered into a purchase agreement with Tucows to buy the assets of Ting Mobile, including more than 200,000 Ting subscribers.

Dish reported retail wireless service revenue of about $1.1 billion for the quarter. Wireless ARPU was $38.17, and churn was 4.64%. The company had 1.104 million wireless additions in the quarter.

New Street Research analyst Jonathan Chaplin noted that while Dish lost 212,000 subscribers in the quarter, it produced $79 million in wireless EBITDA from $1.08 billion in service revenue, both ahead of expectations. “DISH is embarking on a multiyear business that we think could be worth $100BN+ over time, with a $45BN NPV,” with the process playing out in three stages.

Those stages include network planning, locking in one or more anchor tenants and raising enough capital for the network deployment.

“DISH truly has the potential to disrupt the U.S. wireless market,” Chaplin wrote. “We believe their all-5G network could drive a unit cost that is 25% of Verizon’s, which should enable DISH to take meaningful share in wireless, creating significant upside for the equity. Most of the value we see in DISH still lies 5-10 years away, however, so the investment will require patience.”

Other analysts are not nearly as stoked about Dish. MoffettNathanson continues to rate Dish at “Sell” with a target price of $15. Shares currently trade around $27.  

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