Charlie Ergen has been designing to switch from television to the mobile world for years.
The billionaire media manager and former professional poker player has spent $25 billion over the past decade-and-a-half buying mobile spectrum to turn Dish Network, his satellite pay-TV company, into a phone company capable of competing with AT&T sector giants, Verizon and T-Mobile. Eight years ago, he even came close to making a $25 billion bid for Sprint, which was the third largest network at the time.
Then, earlier this year, Dish announced its intention to be the world’s first telecom company to choose to run its service from the public cloud after Make a deal with Amazon To use its servers to control a new 5G network.
If successful, it could prove the case for an entirely different kind of telecom engineering.
According to Ergen, Dish’s transition to a telecom company is driven by a “paradigm shift in technology,” where cloud providers are now able to host all the servers and software capabilities required to run the network.
“This technology is critical. If you’re too early, you’re on your way but if it’s too late, you miss the window,” he told the Financial Times in an interview.
This coincided with government pressure on telecoms companies in countries including the US and UK to use smaller equipment suppliers, after China’s Huawei was banned from deploying new 5G networks for security reasons.
Dish is working with Nokia but also with a long list of US software companies, including Mavenir, Altiostar, Matrixx, Ciena and Palo Alto Networks, to deliver a network seen as a potential pioneer. “OPEN RAN” networks around the world.
“Open RAN” represents a shift that enables telecom hardware and software from different providers to work together, rather than relying on a single large supplier such as Huawei or Ericsson. This allows smaller and potentially innovative suppliers to enter the 5G market. It has been championed by the US and UK governments as a way to increase competition after the Huawei ban.
If Dish proves that it can deploy a new 5G network quickly at a much lower cost – because it won’t have to build and operate its own data centers – its launch could be a milestone. “To the extent that we have success, others will follow,” Ergen said.
Dish’s 5G network will go live in Las Vegas in the third quarter and has begun taking customer orders this month via a website called Project Gene5is.And the But there are many in the industry who remain skeptical that it will have a significant impact on the US telecom market, which is dominated by the three largest groups.
The $8-10 billion budget to build a new wireless network seems meager to some. “You might get decent coverage in half of New Jersey for $10 billion,” said one executive at a rival telecoms company, who said the new 5G network is unlikely to be able to deliver widespread coverage outside of urban areas for years. This would reduce its attractiveness to consumers and business customers who need to travel.
Others pointed out that Dish is moving to telecoms just months after AT&T returned for its foray into new markets by, among other things, spin The closest competitor to the satellite company DirecTV.
For some, wireless payment is key to dish survival. MoffettNathanson’s research team has argued that Dish’s core satellite TV business is likely to report “low levels” to new customers in the future.
Although it’s just getting started, “it’s now fair to say that Dish’s core business is wireless, not satellite,” analysts said.
Ergen argues that it is a farewell to the skeptics of the past. He is called the most hated man in Hollywood because of his image Extremely dangerous battles With content companies it has a fearsome reputation. He outmaneuvered Rupert Murdoch in 2001, and thwarted his initial attempts to buy DirecTV. Ergen was also active in Britain, where he circled his rival by satellite Inmarsat. Withdrew from bidding At eleven o’clock in 2018.
He has definitely seen the skeptics of the past. His $60,000 EchoStar—launched in 1980 by installing “big old-fashioned bowls” across rural America where reception was lacking—propelled him to take off.
The launch of consumer digital streaming services in 1996 under the Dish (Digital Information Super Highway) brand turned him into a serious media player and gave him the lead over cable companies in the pay-TV market. Dish, now separate from EchoStar, has more than 11 million customers and generated $15.5 billion in revenue and a net profit of $1.8 billion in 2020.
Ergen has also pointed to those skeptical of his plans to hefty fines from the US Communications Regulatory Authority – as part of the terms attached to its spectrum licenses – if it does not build its mobile network to reach 40 percent of the US population by next June. . year and 70 percent by 2023. He has previously said that not achieving these regulatory milestones would be “financial suicide” for the company.
Dish already has a small foothold in the mobile market, having bought the Boost brand from T-Mobile in 2020. Boost’s 9 million customer base is less than a tenth of its larger competitors, but Dish has already started to spread after accusing T-Mobile of trying “Competition thwarted” after the larger company moved to shut down an outdated 3G network used by Boost earlier than expected.
Even with Amazon power behind him, Ergin doesn’t promise Earth. “As a fourth player, we don’t think we can conquer the world in the short term,” he said. He added that there are still significant risks associated with launching a network structure that has not been tried before.
However, he believes that his cloud-based network could reshape his business. “We are building Netflix into the Blockbuster world,” he said at his featured box office in Tennessee. “This isn’t our first rodeo.”