Dish Network Chairman Charlie Ergen

Dish Network remains steadfast in its plans to penetrate the highly competitive cellular telecommunications market, including the lucrative enterprise and potentially the fixed-wireless access (FWA) space, but will need to navigate near-term financial and 5G network performance challenges.

Dish currently serves 7.87 million wireless customers, all of which it acquired when it purchased prepaid service provider Boost Mobile as part of the government approving T-Mobile US’ acquisition of Sprint. However it has since steadily been losing wireless customers to rival services from Verizon, AT&T, and T-Mobile US, and its own 5G-based service is not yet gaining significant traction in the market.

Company executives continued to hint at an upcoming commercial push to stabilize its low-margin prepaid operations and begin attracting high-valued postpaid customers to its 5G-based service. Part of that push will be toward the enterprise space.

Dish Chairman Charlie Ergen explained during the company’s most recent earnings call that push could involve Dish working with established enterprise hardware, software, and cloud vendors to package together a cellular component into their respective services.

“The three largest players in the enterprise business today are people like Cisco and Amazon and Dell," Ergen said, according to transcripts of the earnings call. "We have an opportunity to partner with them as a – what I would call subcontractor – where they already have sales forces and relationships. There's a way for us to get into businesses as they get into business. And those companies want to move beyond WiFi into more licensed spectrum and more secure spectrum and more control over their spectrum. So the sales cycles are longer than we like, but the deals are big and we continue to have – continue increased interest in what we're doing there.”

Dish is also eyeing the FWA space, which is gaining traction as a potential way for wireless operators to compete against established broadband providers and also help bridge the digital divide.

“We’re obviously watching what T-Mobile and Verizon are doing with that,” Ergen said of rival offerings. “I think there’s some interesting things we could do with fixed wireless, particularly as you get more into rural America, we have distribution.”

Ergen also noted that current government efforts to fund rural broadband deployments could impact Dish’s FWA plans. He explained that if rivals like T-Mobile US and Verizon were to receive government funding that it would make it more financially challenging for Dish to compete.

“If there’s no government funding, we’re probably pretty competitive,” Ergen said. “And obviously to the extent we have government funding, we’re obviously really competitive. So it’s a bit of an unclear market. How it shakes out, but certainly our network is capable of it. In fact, our network’s capable of it today. And in fact, many of our customers are in a funny sort of way fixed wireless.”

Dish launched commercial 5G services on mid-June, just hitting a government-mandated deadline tied to some of its spectrum licenses. That network is currently live in parts of 120 markets, covering around 20% of the U.S. population.

Dave Mayo, EVP of network development at Dish, explained that the network has around 5,000 sites deployed today, with the carrier tracking to add around 1,000 new sites per month toward a target of around 15,000 sites next year. He noted the team was “pretty happy” with at least the quality of the network’s data performance, though work still needs to be done to improve voice quality.

Dish’s network is based fully on the 5G standalone (SA) or new radio (NR) technology that means it does not have any legacy 4G LTE core components to fall back on. This is advantageous in that it allows the carrier to support more of the 5G technology benefits baked into standards, but lacks a fully baked voice transport component.

“We had a strategic decision to decide on voice, whether we put a bunch of legacy in there that we're going to live with forever, or just go with the better voice, the better voice of [voice over new radio],” Ergen explained. “That has been an unexpected negative in the sense that [it] has taken longer, that many people in [the] industry expected to have VoNR in their systems by the beginning of this year.”

Dish and T-Mobile US are the only domestic carriers currently running voice traffic over their 5G networks. T-Mobile US’ use is limited to just two markets, though it’s planning to roll out the service to “many additional areas this year.”

Dish is also pushing against financials headwinds. Analysts during the earnings call repeatedly asked company executives how it would handle upcoming loan payments, noting that past efforts in refinancing those payments will be more challenging due to rising interest rates.

Ergen admitted that the company did “have some headwinds in the first half of the year,” but that “those should level out in the second half of the year.”

“So hopefully won't have as much of a drag, but it had to do with, obviously the 5G build, it's costly,” Ergen said. “The timing of the payments does cause the drag that you saw in the first half of the year.”

Ergen has said that the full 5G network build could run Dish in the neighborhood of $10 billion, which he said during the most recent call could be spread out until 2025.