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For years, Charlie Ergen has had designs to go from television to mobile mogul.
Billionaire media executive 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 business, into a phone company able to compete with the industry titans AT&T, Verizon and T-Mobile. Eight years ago, it even reached a $ 25 billion bid for Sprint, which was the third-largest network at the time.
Earlier this year, Dish announced its intention to be the first telecommunications company in the world to choose to run its service from the public cloud after establish an agreement with Amazon use your servers to control a new 5G network.
If it works, it could prove the case for a completely different type of telecommunications architecture.
According to Ergen, Dish’s transition to a telecommunications company is driven by “a paradigm shift in technology,” as cloud providers can host all the servers and software capacity needed to run a network.
“This technology is fundamental. If you are too early, you are murdered but if you arrive too late, you will miss the window, ”he told the Financial Times in an interview.
This coincided with government pressure on telecommunications companies in countries such as the United States and the United Kingdom to use smaller equipment providers, after China’s Huawei was banned from launching new 5G networks for security reasons.
Dish is partnering with Nokia, but also with a long list of US software companies, including Mavenir, Altiostar, Matrixx, Ciena and Palo Alto Networks, to offer a network that is considered a potential pioneer of “open RAN” networks around the world.
“Open RAN” represents a change that allows telecommunications hardware and software from different vendors to work together, rather than relying on a large vendor like Huawei or Ericsson. This allows smaller and potentially innovative providers to enter the 5G market. The governments of the United States and the United Kingdom have defended it as a way to increase competition after the Huawei ban.
If Dish demonstrates that it can quickly deploy a new 5G network at a much lower cost, as it won’t have to build and run its own data centers, its launch could be a landmark event. “To the extent that we are successful, others will follow,” Ergen said.
Dish’s 5G network will be launched in Las Vegas during the third quarter and began receiving customer registration requests this month through a website called Project Gene5is, but there are many in the industry who remain skeptical that it will have a big impact on an American telecommunications market dominated by the three largest groups.
Some have a budget of $ 8 billion and $ 10 billion to build a new wireless network. “You may get decent coverage in half of New Jersey for $ 10 billion,” said an executive from a rival telecommunications company who said the new 5G network is unlikely to be able to offer widespread coverage outside of urban areas for years. This would reduce its appeal to consumers and business customers who need to travel.
Others noted that Dish is moving to telecommunications just a few months after AT&T reversed its foray into new markets, among other things. turning the nearest competitor to the satellite company, DirecTV.
For some, wireless push is critical to Dish’s survival. Research group MoffettNathanson argued that Dish’s main satellite TV business is likely to report “minimum levels” of new customers in the future.
While it’s just beginning, “It’s fair to say now that Dish’s main business is wireless instead of satellite TV,” analysts said.
Ergen argues that he has seen out of doubt in the past. Nicknamed the most hated man in Hollywood because of his big bet battles with content companies has a fearsome reputation. He overtook Rupert Murdoch in 2001, thwarting his first attempts to buy DirecTV. Ergen has also been active in Britain, where he turned to satellite rival Inmarsat however withdrawn from the tender at the eleventh hour of 2018.
He has certainly seen out of doubters in the past. His $ 60,000 satellite TV company EchoStar, launched in 1980 by installing “large antique dishes” throughout rural America, where reception was non-existent, took him off the ground.
The launch of consumer digital broadcasting services in 1996 under the brand name Dish (Digital Information Super Highway) turned it into a serious media player and gave it an edge over the pay-TV cable companies in the market. Dish, now separate from EchoStar, has more than 11 million customers and generated revenue of $ 15.5 billion and a net profit of $ 1.8 billion by 2020.
Ergen has also pointed to skeptics of his plans for heavy fines from the U.S. telecoms regulator – as part of the conditions associated with spectrum licensing – if it does not build its mobile network to reach 40% of the American population next June in the year and 70 percent in 2023. He has previously said that losing these regulatory milestones would be a “financial suicide” for the company.
Dish already has a small foothold in the mobile market as it bought the Boost brand from T-Mobile in 2020. Boost’s 9 million customer base is less than a tenth of its biggest rivals, but Dish is already confusing the feathers having accused T-Mobile of trying to “Frustrate the competition” after the larger company moved to shut down an old 3G network that Boost used earlier than expected.
Even with the power of Amazon behind him, Ergen does not promise to land. “As a fourth player, we don’t believe we can conquer the world in the short term,” he said. He added that there is still a high risk related to the launch of a network structure that had not been tested before.
Still, he believes his cloud-based network could rebuild his business. “We’re building Netflix in the Blockbuster world,” he said in his distinctive Tennesseean drawing. “This is not our first reel.”
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