DISH: One Step Closer

Yesterday, DISH announced the release of an RFP regarding network planning, and more explicitly laid out the timeline for the 5G network launch (LINK). This comes after two other RFPs issued earlier this year that addressed the core network (LINK), and project management for the deployment. In this brief note, we lay out the next steps for the DISH’s network business, which we think will ultimately be worth $100BN (see our deep-dive report HERE).

We believe DISH’s network build will take part in three phases, as follows:

        1. Network planning (ongoing): The first step in DISH’s process is selecting the right network and operational partners. This includes provisioning of the core network and RAN (RFP #1, issued in July), internal software (RFP #2, issued in September), and the physical engineering and construction work (RFP #3, to be issued next week). This is the most important part of the process, and we suspect DISH will take its time in selecting vendors, likely taking the process into 2020.
        2. Business case and anchor tenants (mid/late-2020): DISH would then seek to finalize anchor tenants for the various business cases they have laid out: MVNO businesses (Tracfone, Cable), enterprise service providers (Amazon, Microsoft, Google), and purpose-built network users. While they need to finalize Step #1 in order to lock in anchor tenants, discussions with several potential anchor tenants have already begun according to the company. Within each business case, there are several potential anchor tenants DISH could partner with to create a near-term guarantee of revenue.
        3. Capital raise and network deployment (late 2020): After DISH decides on the business plan and anchor tenants, we expect they will raise capital and begin heavy investment in the network; the anchor tenant themselves may be a source of capital. The company has said that it will cost $10BN to deploy the network, roughly in-line with our estimates for peak funding requirements (see slide 41 HERE, where we estimate peak funding requirements of $15BN without Boost, and $9BN with Boost).

In the latest RFP, DISH also laid out the timeline for some of the key operational benchmarks: a market trial in 2020; commercial markets launched by the end of 2020; and nationwide coverage in the first half of 2023. We think the affirmation of the 2020 benchmarks is positive, as it reinforces Ergen’s July commentary that they would “launch some cities” by the end of 2020. The first half 2023 “nationwide” coverage timeframe seems to correspond with DISH’s FCC commitment to cover 70% of the country with at least 15,000 sites by June 2023.