Dish Network has cleared some hurdles in its long march to become a mobile network operator, but considerable work and uncertainty remains. 

Despite the calamity brought on by COVID-19, Dish still plans to launch 5G service in a single market with a network core before the year ends, Chairman Charlie Ergen said. 

Dish expects to spend between $250 million and $500 million on its wireless division this year, but added that it will probably be at the lower end of that range. Ergen also again claimed that the company is confident it can build a nationwide network for $10 billion, albeit with some caveats.

“We haven’t done a good job of presenting that and articulating that,” he said on the company’s first quarter of 2020 earnings call. “That doesn’t include spectrum purchases, it doesn’t include millimeter-wave (mmWave) buildout and those kinds of things, but it includes that total macro layer that’s competitive in the United States, well beyond the FCC requirements.”

Funding for that effort is a major concern among analysts, particularly as the decline of Dish’s satellite and over-the-top TV businesses accelerates. “Building a network will self-evidently be an enormously costly undertaking. Much of the funding for that undertaking will have to come from their satellite TV business,” analysts at MoffettNathanson wrote in a research note. 

For now, Dish’s executive team isn’t flinching and it doesn’t anticipate a need to secure additional funding until next year. Meanwhile, it has a lot to accomplish before then. 

Dish is pursuing three near-term activities to prepare for that wireless network, explained Tom Cullen, EVP at Dish. Those include the integration of Boost Mobile, which Dish is set to acquire from T-Mobile US following its merger with Sprint, completing the architecture and vendor selections, and planning for deployment, he said. 

The company last month inked a deal with Mavenir to provide open radio access network (RAN) software, and it’s continuing to evaluate proposals from other vendors. As part of that effort, Dish’s executive team is in regular contact with Rakuten Mobile, which recently launched a network under the same open RAN, cloud native, virtualized framework, Ergen explained during the call.

“Mavenir is the first company that really met the kind of guidelines that we needed and they’ll by no means be the only vendor that we use,” Ergen said. Dish is also conducting radio frequency planning, having regular discussions with tower companies, and expects to make more vendor selections in the third quarter of 2020.

“We now know that [open RAN] is real. It’s not pie in the sky, we know that there’s vast support in the United States and around the world for it,” Ergen said. “If we’re not allowed to use Chinese equipment because it’s a national security issue for whatever reason — Huawei’s really good, the Chinese equipment is really good, it’s best in class — the only way we’re going to be better is to out innovate.” 

Open RAN, virtualization, cloud native, and automation efforts all factor into that goal. “We get to help lead that. We get to be part of that team,” he said. “The momentum for the kind of things that we’re trying to do are clearly recognized outside of Wall Street and the analyst community, it’s clearly recognized by the people that know what a modern network should look like.” 

Nonetheless, Dish’s confidence is not shared widely among analysts. “History tells us that it is difficult, and rarely advisable, to fight a war on multiple fronts. Dish is fighting a multiple-front war,” analysts at MoffettNathanson concluded.

“Despite constant doubts as to whether they are ‘serious’ – there remains a widely held view that they will attempt only to minimally meet their buildout requirements before selling their spectrum in seven years to the highest bidder – there is the nagging reality that a minimalist approach simply isn’t an economically viable option,” the analyst firm wrote.  

In a 10-Q filing with the Securities and Exchange Commission, Dish said it has directly invested more than $11 billion on wireless spectrum licenses since 2008, and an additional $10 billion in “non-controlling investments in certain entities” related to wireless spectrum licenses. 

To meet guidelines imposed by the Federal Communications Commission (FCC) to begin using that spectrum, Dish in 2018 embarked on a plan to deploy a nationwide Narrowband IoT (NB-IoT) network that never saw the light of day. It scrapped that effort once the combination of T-Mobile US and Sprint created an opening for it to become a mobile virtual network operator and the FCC eased requirements as part of those negotiations.

Dish wrote down $253 million during Q1 related to that failed NB-IoT effort, and Ergen said it spent roughly double that before it shifted gears. “Now we’re building a broadband network that will be the envy of the world,” he said. “We are going to build a better network that’s less expensive, and less expensive to operate, and more flexible.”