Analysts are concerned that Dish Network may not be able to fully establish a standalone wireless network for $10 billion.
As part of the deal to allow T-Mobile and Sprint to merge, Dish acquired spectrum to establish itself as a fourth wireless carrier. The move was to address anti-competitive concerns if the market went from four to three major carriers. For Dish, however, that means taking the spectrum it is acquiring from Sprint and building out much of its network from scratch.
In the Q4 earnings call, Dish Chairman Charlie Ergen defended the company’s ability to deliver the network within budget, citing a number of newer technologies that would assist.
- One significant factor is Dish’s plan to use OpenRan technology, a standard that helps wireless operators use equipment from different vendors. This helps prevent them from getting locked into a single vendor whose equipment may be more expensive, or who may raise prices down the road.
- Dish will also be relying heavily on automation and cloud-based software to run its new network.
- A third, significant factor, is the lack of technical debt, the term used to describe the costs associated with maintaining legacy hardware and software, and ensuring backward compatibility. Anytime the other major networks roll out a big change, they have to keep one eye looking to the past, ensuring they don’t break something that will impact customers. In rolling out a new network, Dish has none of those concerns.
Another factor that should also alleviate some of the pressure is the deal Dish has with T-Mobile to piggyback on its network for up to seven years while it builds out its own. Analysts and customers alike will be watching closely to see if Dish’s optimistic outlook pays off.
