Dish Network Entering Wireless Mobile Market

Where are those Blockbuster Video stores now?

Dish Network is becoming the nation’s fourth wireless carrier following the Department of Justice’s approval of T-Mobile’s $26.5 billion acquisition of Sprint.

In a shrewd deal hammered out by Dish co-founder/chairman Charlie Ergen, the satellite TV operator helped facilitate the merger’s anti-trust issues with regulators by getting T-Mobile and Sprint to agree to sell prepaid wireless service Boost Mobile and related spectrum assets for $5 billion.

The prepaid businesses, including Boost Mobile, serve approximately 9.3 million customers in all 50 states and Puerto Rico.

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At close, Sprint’s prepaid businesses and customers will immediately move to Dish, as will the more than 400 employees and nationwide independent retail network that supports more than 7,500 retail outlets.

Dish’s asset acquisitions from Sprint include a $1.4 billion purchase of Sprint’s prepaid businesses, and a $3.6 billion agreement to purchase Sprint’s nationwide 800 MHz wireless spectrum. The spectrum purchase is expected to be completed three years after the closing of the acquisition of the prepaid businesses.

Dish will activate all new wireless customers on the New T-Mobile network. Existing prepaid customers will be supported on the Sprint legacy network and will eventually transition to the New T-Mobile network.

“These developments are the fulfillment of more than two decades’ worth of work and more than $21 billion in spectrum investments intended to transform Dish into a connectivity company,” Ergen said in a statement. “Taken together, these opportunities will set the stage for our entry as the nation’s fourth facilities-based wireless competitor and accelerate our work to launch the country’s first standalone 5G broadband network.”

Indeed, Dish acquired bankrupt Blockbuster Video in 2011 largely to transition the home video chain’s stores into future mobile wireless retail centers. That plan never materialized after Dish shuttered all company owned Blockbuster stores in 2013.

“As a new [satellite TV] entrant [in 1995], Dish encountered many skeptics who questioned our ability to succeed,” Ergen said. “But, customers loved the disruption we brought to the marketplace with innovations such as a 100% digital experience, local-into-local broadcast, the DVR and ad-skipping. As we enter the wireless business, we will again serve customers by disrupting incumbents and their legacy networks, this time with the nation’s first standalone 5G broadband network.”

The Sprint asset transactions are subject to customary conditions, including the closing of the Sprint and T-Mobile merger, government approvals, and confirmation that Dish is able to provision customers on the New T-Mobile network.

Closing is expected within three months following the completion of the Sprint and T-Mobile merger.

Trump Signs Memo Saying U.S. 5G Wireless Leadership ‘Imperative’

President Donald Trump has issued a memorandum urging progress in spectrum technology.

The memo he signed, with the subject line “Developing a Sustainable Spectrum Strategy for America’s Future,” states, “It is imperative that America be first in fifth-generation (5G) wireless technologies — wireless technologies capable of meeting the high-capacity, low-latency, and high-speed requirements that can unleash innovation broadly across diverse sectors of the economy and the public sector.”

The memo asked government agencies to report to the Secretary of Commerce about their future spectrum requirements and directed the Office of Science and Technology Policy to submit a report on emerging technologies and their expected impact on non-federal spectrum demand. The OSTP is directed to issue recommendations for research and development priorities for spectrum access and efficiency.

The memo also directs the Secretary of Commerce to report on the status of existing efforts and upcoming spectrum repurposing plans as well as legislative, regulatory and other policy recommendations on increasing spectrum access for all users, creating flexible models for spectrum management that promote efficient and effective spectrum use, and using ongoing research to develop new technologies.

Finally, the memorandum calls for a Spectrum Strategy Task Force that will work to implement the new memorandum.

Dish Network Owner Eyeing U.K. Satellite TV Market?

NEWS ANALYSIS — On the heels of 21st Century Fox, the Walt Disney Co. and Comcast collectively coveting U.K. satellite TV operator Sky, Denver-based EchoStar Corp. is also gazing across the pond.

Headed by Charlie Ergen, majority owner of Dish Network, EchoStar reportedly made an offer for Inmarsat, a London-based satellite telecommunications company with more than $1.4 billion in revenue in 2017.

While Inmarsat’s stock price jumped 14% following the undisclosed financial offer, the company considered it below its market value and rejected it.

“It very significantly undervalued Inmarsat and its stand-alone prospects,” the company said in a June 8 statement. “The board remains highly confident in the independent strategy and prospects of Inmarsat.”

Unlike Disney, Fox and Comcast’s interests in Sky’s 10 million pay-TV subscribers, Ergen is more interested in Inmarsat’s radio spectrum portfolio.

As media distribution increasingly becomes wireless, spectrum plays a key role in how that distribution channel works. Most major industries rely on wireless technologies that depend on spectrum access to function, including cellular, broadcast and satellite.

In the United States, regulatory responsibility for the radio spectrum is divided between the Federal Communications Commission (FCC), and the National Telecommunications and Information Administration (NTIA).

In 2017, Ergen reportedly spent $6.2 billion acquiring spectrum rights in government auctions – second only to T-Mobile. Dish reportedly owns about $35 billion worth of spectrum rights in the U.S., despite not yet operating a wireless network – as do Verizon, AT&T, T-Mobile, Sprint and Comcast.

Cellular distribution was one of the reasons Dish acquired the bankrupt Blockbuster Video chain in 2011. It had hoped to use the video store’s retail footprint to jumpstart branded and third-party mobile devices. That strategy stalled in 2013 when Dish shuttered the remaining Blockbuster-owned stores.

In 2015, Dish Launched Sling TV, the industry’s first online TV service. With more than 2 million subscribers, Sling TV represents Dish’s future as traditional linear TV declines.

With AT&T launching DirecTV Now, Charter operating Spectrum TV Plus, and Disney bowing ESPN+, Ergen has voiced interest in launching a wireless network by 2020 to better accommodate Sling TV to mobile consumers.

A year ago, Comcast did just that bowing Xfinity Mobile – a wireless service targeting the cabler’s 25 million broadband subscribers.

“Wireless is hyper competitive,” Dave Watson, CEO of Comcast Cable, said last year.“We will measure our success very differently than other wireless carriers. It will be designed to support the core cable business.”

Indeed, Ergen has similar designs involving Dish Network, and could license his spectrum portfolio or use it as leverage to entice merger and acquisition offers from third parties. Last December, Ergen stepped down as CEO of Dish to focus on wireless. Maybe that will include revisiting the Inmarsat offer.