Dish Plans to Roll Out IoT Network by March 2020; Details M&A Overtures

With its March interim milestone deadline almost up, Dish Network now says it will roll out a 5G-centric NarrowBand (NB) IoT network within 36 months, and detailed unsuccessful attempts at mergers and acquisitions with carriers including Sprint. "We do not believe that it serves the public interest or makes business sense to build out a 4G/LTE network now that would duplicate networks already offered by the wireless incumbents, and subsequently require an almost immediate upgrade in order to be competitive," Dish said in an FCC interim construction notification Tuesday. The company said it has two possible buildout routes for its AWS-4 and lower 700 MHz E block spectrum licenses: an interim milestone deadline of this month with a final milestone in March 2021, or an accelerated final milestone with a March 2020 deadline.

Not meeting that interim deadline was no surprise since the company hasn't started construction, Citi analyst Michael Rollins emailed investors Wednesday. He said the filing committing to the 2020 deadline could be a negotiating tactic. It seems to indicate that meeting the coverage requirements could be a tenth the cost of a similarly situated LTE network, Citi said. Rollins expressed some skepticism, saying NB-IoT has limited network uses given its 250 kbps peak speeds and lack of voice support. He said the NB-IoT standard has gotten support internationally but Cat-1 and Cat-M are the preferred AT&T and Verizon standards and are "on T-Mobile's development path." Dish didn't comment.

The plans show it "has not merely been sitting on this spectrum as many wrongly suggest," wrote BTIG analyst Walter Piecyk to investors. He said the IoT "could be a material opportunity for Dish," though better use of the spectrum would be in a wireless operator's existing network since its spectrum "provides a low-cost and sizable capacity supplement for data growth on smartphones and new IoT revenue opportunities" from small cell deployment. BTIG said a Dish IoT buildout could be a fraction of the costs Comcast likely faces in building out its fiber footprint as part of its wireless service deployment. The analyst said Dish might start talks with an existing operator or tower, cable or technology company to cut those buildout costs further once the current FCC incentive auction quiet period ends.

The NB-IoT approach seems designed to minimize capital expenditures, satellite consultant Tim Farrar said. He also said it could be an attempt to use just part of Dish's spectrum holdings and leave the 700 MHz E band separate for some other use -- including a possible sale to AT&T -- since the 700 MHz E band doesn't seem to fit in the IoT plan.

CEO Charlie Ergen largely indicated plans for an accelerated build on the two spectrum swaths instead of a two-step approach, in the company's February earnings call, Wells Fargo analyst Marci Ryvicker wrote investors. She said Dish hasn't been able to explore possible partnerships because of the incentive auction, and though the company indicates it plans to go solo on the network, "we don't know that he had any other choice given no one has been able to communicate since the forward quiet period" that started in February 2016.

Dish left the door open to those kinds of directions, saying it "will continue to explore partnership opportunities." In the meantime, Dish said it will deploy the 5G network either solo or with SNR Wireless and Northstar Wireless, the Dish-affiliated designated entities that bought spectrum in the AWS-3 auction. Dish called itself "open to exploring joint build partnerships that could reduce overall network deployments costs for [itself] and other operators who may be upgrading or deploying their own networks in the same time frame."

The company laid out all various routes it has been taking in advance of deployment of the spectrum licenses. Those include acquisition overtures to existing wireless companies MetroPCS, Clearwire and Sprint, only to be outbid each time; the purchase of satellite companies DBSD and TerreStar and subsequent FCC petition to repurpose their spectrum into AWS-4 for terrestrial use; transformation of the AWS-4 uplink spectrum into downlink; and numerous tests to determine spectrum use viability. ​

In Q4, it put out a technology selection request for information to vendors, covering multiple configurations and technologies plus other Dish-licensed spectrum, the company said. Dish said the RFI also asked about possible combinations of its spectrum with SNR/Northstar AWS-3 unpaired uplink spectrum. It said it will spend the next few months working with various device, service and infrastructure vendors "to select suitable equipment, product roadmaps and services offerings," with deployment within 36 months.