Casual observers might think its big subscriber losses for its satellite TV business is major concern. Yes, but mostly no.
That’s because Dish Network’s future business effort revolves around wireless communications -- all that talk of the bigger promise of 5G technology.
At the same time, Dish has been amassing wireless spectrum. But it isn’t going quick enough. It has worries about meeting a federal regulatory goal to get a wireless communications business up and running by 2023. It was behind the eight ball.
AT&T has now essentially thrown Dish a lifeline — the backbone of infrastructure technology to aid its efforts to be a “mobile virtual network operator.”
An MVNO operates like a traditional mobile communications operator (AT&T, Verizon, T-Mobile) except that it does not own any wireless network infrastructure. Instead, it enters into agreements with regular mobile network operators thatdo.
AT&T’s long-term agreement with Dish -- a 10-year deal -- complements one Dish made with T-Mobile as part of its 2019 deal to buy wireless spectrum. Boost Mobile prepaid $5 billion worth of business.
Headlines concerning a deal between AT&T and Dish Network spiked another obvious and longtime discussion -- a potential merger deal with ATT’s DirecTV. A DirecTV/Dish merger has been merger news fodder for nearly two decades. (AT&T now has a 70% in the business through a recent deal to sell a 30% minority equity stake to investment asset firm, TPG Capital.)
Early on, federal regulators put the kibosh on a DirecTV/Dish Network merger -- during the heyday of satellite pay TV growth.
Now, it’s an afterthought for many.
A merger could get approval this time around, some analysts say -- especially given stronger competition -- streaming and otherwise -- against DirecTV and Dish. But financially does it make sense for the future of pay TV distribution, given legacy subscriber declines?
Why did AT&T go this direction -- as a “wholesaler” of mobile technology, one that props up future virtual mobile providers? Analysts like Craig Moffett, principal/communication analyst of MoffettNathanson Research, believe this is short-term thinking.
But the deal does help Dish. Moffett says Dish would need to build out infrastructure by itself. All that would be a huge capital investment. Dish can save money by just focusing on dense population areas, leaving AT&T to cover more rural regions.
Concerning TV-media content, Dish Network obviously sees the wireless communication business as the real next-gen technology for all kind of content distribution, much more than diminishing TV platforms, such as cable, telco and yes, satellite TV.
Streaming, connected TV, digital? All that will be attached to the growing wireless communications business. Cable, satellite and telco providers? Hold up. Everyone will need a new plan.