Days after outlining how it plans to take off from scratch as a major wireless provider in the United States and launch 5G service by the end of next year, Dish today reported earnings for the second quarter – and they are another reminder of exactly why the satellite TV provider is turning into a mobile provider.
Dish lost 79,000 satellite subscribers in the quarter. The company's streaming TV service, Sling TV, added 48,000 customers, but Dish still left a net loss of 31,000 customers and continues to be the story that pay TV is declining. Satellite drops, but Sling TV is a bright spot; it grows and distinguishes itself from rivals as the cheapest of the most important internet TV services. Yet competitors such as YouTube TV and Hulu are running fast, even after Sling's lead. So after years of talking about it, Dish branched out to mobile and got assistance from the US Department of Justice to get there.
When the T-Mobile and Sprint merger overcomes a challenge from several US states, Dish gets away with all of Sprint's prepaid companies, including Boost Mobile (a total of 9 million customers), the 800 MHz spectrum licenses of the courier and unrestricted access until the merged courier network for 7 years. But reinventing yourself can incur costs: Dish pays $ 5 billion in total, and Dish Chairman Charlie Ergen, who played a direct role in the negotiations between T-Mobile, Sprint, Dish and the Justice Department, said the second phase of Dish & # 39; s mobile buildout will ask for at least $ 10 billion.
"I am certainly willing to put more money into this company if needed," Ergen said during the company's call for profit on Monday afternoon. Remember that the Verizons and AT & Ts of the world have been depositing money into their networks for decades. Starting from scratch is a frightening proposition – even if you have the spectrum to do it.
And yet Ergen wants Dish to quickly become a mobile provider, to tell The Wall Street Journal "We get somewhere in three years that the other boys will cost 10 years" and floating ideas such as on-demand data plans that would cost less during off-peak hours. While Dish is working to set up 5G infrastructure, it will in any case be able to fall back on the T-Mobile network – something it would not have had if it had tried to use its existing spectrum assets to become a mobile provider rather .
"There was no point in building a 4G network the following year and breaking it all down," Ergen said, in response to criticism that Dish had been a do-nothing spectrum hoarder.
Now, Ergen is convinced that these divestments that the Ministry of Justice is urging will place its business in an advantageous place, allowing it to finally use all the spectrum it has acquired over the years to run an independent 5G network. to build. "We didn't collect spectrum," he told Axios last week. "We collected enough spectrum to compete with the industrial giants." He also told the diary that he once intended to acquire Sprint, but was outbid by SoftBank, the company that effectively cashed in with the $ 26 billion merger.
But even the merger assets and $ 10 billion will not be enough to agree with Verizon, AT&T or the new T-Mobile, so it will be interesting to see what Dish is doing now. Dish could seek more capital – the company is convinced that it will have an easier time now that it has a concrete, clear plan – but it may also partner with other companies such as Google or Amazon in its mobile efforts. However, it is forbidden to fully sell the ownership of the assets it receives from T-Mobile and Sprint in the coming years.
The relatively small size of Dish is perhaps the reason why the 5G network becomes a process from city to city; in the meantime, the company will focus on Boost Mobile and expand the prepaid-only offering that it is today to a brand that also includes postpaid service. Just like other providers, you can count on Dish combining its video and mobile products. A bundle of Sling TV and Dish Mobile is virtually guaranteed.
Of course, all of this is based on T-Mobile and Sprint who are facing the final big hurdle about their merger faces. Ergen, a former professional poker player, said "I am not a gambler" during today's telephone conversation and assured investors that the odds are very, very good that everything continues as explained last week.