Dish Network’s First 5G City in Late Q3 Will Be a Big NFL Market: Ergen
Getting a big city “up and operational” with a “beta” 5G service will be Dish Network’s “first major milestone” in its deployment buildout, Chairman Charlie Ergen told a Q4 call Monday. “As we open up our first city, we’ll have problems," he said. "We’ll drop a call. Something could go wrong that we didn’t expect, and then that’s where we find out how our team and our vendors work together to solve those problems."
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Dish is on track to turn on its first 5G city by Sept. 30, said Ergen. “Every month after the third quarter, we’ll be doing multiple cities,” targeting 5G coverage to 20% of the U.S. population by June 2022 “to meet our first FCC milestone,” he said. “By the end of the third quarter, you’ll be able to take a phone and see if we work or not.” The FCC obligation also is to provide 5G coverage to 70% of the U.S. by June 2023.
Ergen shared little about the first Dish city, except to say it will be a large NFL market. “We certainly hope to have handsets for consumers, although it’s going to be a beta test.” Observers need to realize, “we’re not going to be running in the first city, we’ll be crawling,” he said. “We’ll get up, and we’ll be walking by the end of the year.” Once the network “bugs” and “kinks” are resolved there, “it’s cookie-cutter after that,” he said.
Dish assembled a 5G “distributed deployment team in many markets around the country,” said Tom Cullen, executive vice president-corporate development, responding to a question about the “cadence” of planned city-by-city rollouts. “RF planning is completed, and we now have coordinating and zoning activity underway in dozens of markets around the country. The activity level is very, very high.”
2020 was a “very successful transition year for us” in 5G, said Ergen. “Once you get through the transition phase, it’s all about execution. There certainly are significant risks for us as we go execute. We have to deploy our network, and then we’ve got to put it all together to make it work.”
The retail wireless segment had a $162.74 million operating profit for the year on $2.58 billion in revenue. It finished 2020 with 9.06 million wireless subscribers, mostly the Boost Mobile customers acquired in the T-Mobile transaction. Six months into Boost ownership, “we’ve had a lot of operational improvements to make” in the segment, said John Swieringa, executive vice president-group president, retail wireless. “We are focused on building new, more profitable distribution channels.”
Dish is “working through some very big technology and operational projects,” said Swieringa. Dish got notice from T-Mobile that the CDMA network on which the Boost service operates will be “discontinued” around Jan. 1, 2022, he said. For the "majority of our retail wireless subscribers receiving services from that network, we’re hard at work planning a big migration” elsewhere, he said. “We can’t be certain that the network will actually shut down on that timeline, but we have to plan and act as if it will, which will be costly for us.”
We're told the carrier is working to gradually phase out older technologies like CDMA to free up capacity for LTE and 5G. It hasn't said publicly exactly when that might start to happen. Dish first disclosed notice of the possible CDMA network shutdown in its SEC filing Monday. T-Mobile didn't comment.
Sling TV had 118,000 net subscriber losses in 2020, compared with 175,000 net subscriber additions a year earlier. Dish blamed the downturn on lower subscriber activations caused by competition from subscription VOD and live-linear over-the-top service providers. Delays and cancellations of live sports from COVID-19 were another factor, it said.
Ergen agreed with an analyst’s “premise” that Sling should have higher market share than it does, he said. “We stumbled a little bit with just the quality of the user experience. Our network was best at first, but we got maybe a little complacent.” Sling has “room to improve, that’s for sure,” he said.