Ergen Wants T-Mobile Pact; Notes Smartphone Crunch

ASPEN, Colorado -- Dish Network Chairman Charlie Ergen hopes to settle with T-Mobile over the satellite-TV company's concerns that the wireless carrier plans to turn off an older 3G network that serves Dish prepaid customers. Ergen told a Technology Policy Institute event he thinks something could be worked out. It's a message he repeated in a brief encounter with a T-Mobile representative who approached him afterward. Ergen also noted he hadn't heard of any T-Mobile data breach (see 2108160056).

Ergen noted that amid the pandemic, there's a crunch on getting smartphones to run on his company's coming wireless network. "We have had supply disruptions, but if they don’t get worse," it will be OK, he said in a TPI Q&A. The T-Mobile CDMA network shutoff may be an issue, too, he said. "Right now, I can say we’re on track. And we just have to keep our fingers crossed."

Dish remains "on track to meet our deadline" with the FCC, Ergen said in a later interview. He said getting sufficient phones was complicated by Vietnam's factory shutdown because of COVID-19 as well as LG exiting that business amid the industry move to 5G. And "it's not like T-Mobile is shipping us extra phones now," he added. Shortly after our conversation, when a T-Mobile rep approached him, Ergen said he hopes to reach a deal on the network shutdown to "do the right thing by consumers." T-Mobile didn't comment for this article beyond citing a blog post from last week.

The Dish co-founder's long expectations that his company could combine with DirecTV also got a reprise Monday. "We’re just not getting any new subscribers" for satellite, he said of the two direct broadcast satellite service providers, noting they have perhaps some 20 million such subs combined. "The marketplace has kind of spoken." Since TPG invested in AT&T's DirecTV, that investor "obviously would have the biggest say so in that," Ergen said of any transaction.

He said odds are maybe 100% a deal could happen eventually. "It’s inevitable. Because you can’t justify the investment in new satellites today. So they are going to run out of fuel." Some still want to watch TV on satellite, Ergen said. Over-the-top video providers are adding users, with three or four such OTT companies each having over 100 million subs, he noted. AT&T didn't comment.

Of Dish and T-Mobile, “we’re really competitors and I think there’s things that you would do in the public interest” that might be different from what's happening, Ergen said. “It’s not as healthy a relationship as we would like to see.” He "would expect the companies to work together, because you have a common objective not to displace customers.” He said T-Mobile's plan to turn off its 3G network affects only Dish and so seems aimed at the DBS company, noting that the carrier isn't turning off its 2G network: “It clearly is an anti-competitive effort aimed at Dish.”

Ergen took some shots at 5G. Dish's prepaid customers "are not asking for 5G” and so don't need to use newer T-Mobile networks that will stay online, Ergen said. "They are just asking for something dependable.” He said fifth-generation wireless may not carry substantial differences to what's now on smartphones. Fifth-gen now is “more of a marketing effort,” Ergen said. 5G Americas President Chris Pearson declined to comment on Ergen's remarks.

T-Mobile's recently announced executives are "still maturing as a management team" and seemed to have looked at the contract with Dish and decided the 3G system could be phased out, Ergen said: "Maybe a more-seasoned management would say" otherwise. "It’s sometimes hard to be a good winner," Ergen said of T-Mobile, similar to his comments on Dish's Q2 call (see 2108090008). "Everybody met that guy in grade school that beat you at something" and then "stuck his finger in your face."

"The FCC certainly has the ability to step in" on the dispute, Ergen said. He declined to tell us if he had heard any indications that would occur. He noted that California regulators are looking at the looming cutoff (see 2108160021). “I prefer to work with [T-Mobile], and I haven’t given up hope," Ergen told TPI.

Ergen hopes for a full complement of FCC members, and noted the agency issued a public notice on his company’s petition for rulemaking on 12 GHz. “We spent five years asking for the FCC to take a look at it,” he noted. “We think the spectrum has a lot of use" including in wireless, Ergen said. “Adults in a room sometimes can solve a problem” such as using this spectrum swath, he said: “Hopefully, the FCC doesn’t have to make some tough decisions there.”

The current 2-2 commission probably isn’t “going to engage in anything controversial,” Ergen said. He hopes President Joe Biden nominates another member for the agency so the body can move forward on controversial matters.