Dish Picks Amazon Web Services for 5G Network
Names Las Vegas as first city for wireless offering
With two years to go before it has to light up 70% of the country with its proposed 5G wireless service, Dish Network said it has inked a “strategic collaboration agreement” with online giant Amazon’s Amazon Web Services, selecting Las Vegas as the first city to receive service.
Dish shares were up 5.4% ($2.01 each) in early trading April 21 to $38.90 per share on the news. The stock was priced at $38.70 per share, up 5% as of 10:40 a.m. on Wednesday.
Dish has been amassing wireless spectrum for years to build out its network, and last year agreed to buy another $3.6 billion worth of spectrum from T-Mobile over three years, part of the conditions imposed by the feds on the larger wireless company’s purchase of Sprint. As part of that deal, Dish has to build out its network to at least 20% of its footprint by 2022 and 70% by 2023, or risk losing those licenses.
Also Read: Dish: No Partner Needed for 5G Wireless Dance
The satellite company is basing its 5G offering on Open Radio Access Network (ORAN) technology, which utilizes a series of small antennas and base stations to deliver service via the cloud. With that tech focus, AWS, the most popular cloud provider on the internet, is a natural partner.
Also Read: Dish Wireless Pushed Forward
The selection of AWS is the next step in the long process of building the network. In an email message, MoffettNathanson principal and senior analyst Craig Moffett likened the deal to a similar arrangement AWS has with Verizon.
“It’s certainly far short of the big strategic partnership people so many people have been waiting for,” Moffett said in the email. “ Strip away the marketing-speak, and the press release is really just an announcement that Dish has chosen AWS as a vendor. What’s missing is any serious reciprocal commitment from AWS. If anything, it reads as less of a strategic partnership than the one that Verizon already has with AWS.”
Dish said the cloud-based service simplifies the process for developers to create new applications.
“Through this collaboration with AWS, we will operate not just as a communications services provider, but as a digital services provider harnessing the combined power of 5G connectivity and the cloud,” Dish chairman Charlie Ergen said in a press release. “Together, we will enable our customers to take full advantage of the potential of 5G. Our approach will revolutionize wireless connectivity by giving customers the ability to customize and scale their network experience on-demand.
“As a new carrier, leveraging AWS and its extensive network of partners enables us to differentiate ourselves by operating our 5G network with a high degree of automation, utilizing the talent of AWS-trained developers and helping our customers bring new 5G applications to market faster than ever before,” he continued.
Dish has been under the gun to start building the service -- it has to build out 20% of its footprint by the end of 2022 -- and in December issued about $2 billion in convertible notes to help fund the buildout. On its March earnings conference call with analysts, Ergen said that offering, coupled with about $4 billion in cash on hand, gives the satellite company sufficient firepower to build the network.
Dish has said it would cost about $10 billion to build its 5G network, a figure that some analysts have feared is too low.
“DISH’s cloud-native and truly virtualized 5G network is a clear example of how AWS customers can use our proven infrastructure and unparalleled portfolio of services to reinvent industries,” Amazon Web Services CEO Andy Jassy said in a press release. “This collaboration means Dish and its customers can bring new consumer- and enterprise-centric services to the market as quickly as they’re created to deliver on the promise of 5G. Together, we’re opening the door to new technologies that will transform factories, workplaces, entertainment, and transportation in ways people have only dreamed.”
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Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.