(Reuters) – Dish Network (DISH.(O) attempt to create a fourth US wireless provider may cost billions more than expected, and that pits it against the giants, but the satellite-TV provider, and has an advantage of a fresh start, with no legacy technology to maintain, and the deep-pocketed partners are ready to assist you.
FILE PHOTO: A Dish Network receiver is hooked to a home in Somerville, Massachusetts, united states, February 21, 2017. REUTERS/Brian Snyder/File Photo
US wireless carrier T-Mobile US Inc (TMUS.(O) and Sprint Corp (S. N), received approval on Friday for their $26.5 billion merger on the condition that they will sell the Sprint prepaid wireless business and on some mobile phones Charger, which paved the way for the satellite provider, is the owner of $20 billion for the spectrum, and to enter, you must enter the wireless phone market and Number 4 in the company.
Dish has been stockpiling wireless spectrum, or the airwaves that carry the data, and are faced with a threat to March 2020 is the deadline for the construction of a product, with the use of the spectrum in order to meet the requirements for a license.
The company is also faced with the challenge of paying for it, and the roll-out of the technology and convince consumers to leave the entrenched, larger competitors, which are much better known.
Dish’s founder, Charlie Ergs to step down from his role as CEO until 2017, to focus on the structure of the wireless business, and he remained firm in the midst of the project, in spite of the confusion of analysts and investors.
“I’m not going to convince anybody here, so I’m going to have to stop talking to you, right?” Ergs said during the first-quarter earnings call with analysts questioning its wireless strategy. “But to us in the next couple of years.”
Dish has said that it will spend $10 billion on the second phase of network buildout, and a reduction in the rate of that, Craig Moffett, an analyst at MoffettNathanson, said it has not been possible in a research note on Thursday.
Verizon Communications (VZ.(N) it spends $15 billion a year to its existing network, Moffett said.
“The idea that a Court would be able to pay $10, and then, in one way or another, are finished, well, just plain stupid,” he wrote.
Analysts New Street Research has had a more positive view of the fifth wheel is a great chance given its network, it will have to be built from the start with a 5G, it will be the new standard for wireless networks that are just starting to roll out.
It works with a wireless network, the network engineers, the New Street, provided that, in the Court of the costs incurred for the construction of the network would be much lower than that of its competitors, for it is only in the construction of the network, compared with its competitors, who have to maintain multiple networks, and Dish network will be virtual, and can save money on the cost of the maintenance of the physical and wireless internet.
Eventually the Court of first instance, the cost per unit of data, it would be 75% less than Verizon’s, and 55% lower than in the case of AT&T and T-Mobile, the analysts said.
On top of the $10 billion to Dish and said that it will be spent on the construction of the network, it will need another $10 billion to fund operating losses, New to the Street, he said.
In addition, Courts will not have any trouble in finding additional capital to build its network, given that there are a lot of companies are eager to help you at the time of the three large, well-established companies, the New Streets shall be calculated.
“There are plenty of deep-pocketed companies that would like to support the Dish’s efforts, the analysts said, naming the Amazon.com Inc. (AMZN.(O) and Google (GOOGL.D) if two potential partners.
Reuters earlier reported that Amazon was interested in buying it from T-Mobile’s assets in order to gain access to the network of The New York Post earlier reported that Google was in talks with Dish to create a fourth carrier. Google said: “these claims are simply false,” in the report.
The dish needs to have a partner to offset financial risks, according to analysts with research firm Cowen, in a note earlier this month. Amazon and Google might be interested in, because of their work on the Internet of Things and cloud industry, Cowen said.
And with the introduction of the wireless business, it is a good opportunity for the Court to be given to their satellite TV business will collapse,” said Roger Entner, a telecom analyst with Recon Analytics.
“But it’s also a big risk for them, because we have already entered the wireless market, and the Dish comes out in a weak carrier, without the appropriate network, and the distribution,” he said, adding that consumers should be able to end up with another weak national carrier.
The dish is to follow in the footsteps of AT&T Inc (T. N), which is both a satellite-TV and wireless-phone company. Dish to be able to provide a similar package of TV and wifi in the same way, if AT&T does.
Under Friday’s agreement, Dish will pay $1.4 billion for a two-up Sprint in the prepaid phone business for $3.6 billion after three years, to purchase spectrum licenses in the 800 megahertz range, which is the ether, good for carrying data over long distances and to rural areas.
Court shall be commenced by 9.3 million users, a prepaid Sprint company, as compared to u.s. Cellular, the fifth largest carrier in the united states of america, and has about 5 million users. It’s promised to be able to serve about 70 percent of the U.S. population in 2023.
Report by Sheila Dang, and Angela Moon; Editing by Nick Zieminski