DirecTV's proposed buyout of Dish's TV business lifts billions of debt off Dish's and EchoStar's shoulders
One analyst said that the deal increases the likelihood of a 4th nationwide 5G network
A more healthy Dish could prove to be a lifeline for 5G open RAN suppliers
The DirecTV buyout of Dish’s satellite TV business for a symbolic $1 actually removes a massive amount of debt from Dish’s parent company EchoStar and should enable the completion of Dish’s nationwide open radio access network (RAN) 5G network if it all goes smoothly.
EchoStar stated that the deal will cut its total debt by $11.7 billion, which includes $9.75 billion of Dish’s debt. Even before the deal closes, EchoStar will get $2.5 billion in financing from DirecTV and TPG credit unit Angelo Gordon that will help it pay off Dish’s $2 billion bond, which was due in November.
Dish has currently completed over 70% of its nationwide 5G build and had said that they were on track to complete 80% of the network by the end of the year. That had been stymied by the need to pay off the looming $2 billion bond, noted Recon Analytics analyst Daryl Schoolar who talked with Fierce Network today. The immediate debt burden will be lifted off Dish’s shoulders, allowing it to continue with its 5G plans, the analyst noted.
Scholar stated that if the DirecTV/Dish DBS merger gets regulatory approval that will make a full Dish nationwide 5G network that much more likely. “If it all goes through I think that’s definitely a positive for getting a fourth nationwide 5G network in this country,” Schoolar said.
Meeting the regulators
Much of Dish’s 5G buildout so far has been mandated by the Federal Communications Commission (FCC). The commission set the goal for 70% of the U.S. population to be covered by summer 2023 as part of its ongoing plan for the Dish buildout. The agency has mandated 75% coverage by June 2025, although EchoStar has said it will offer 80% coverage by the end of this year.
Schoolar said that one of the reasons that the DirecTV merger may get approved is because of the government’s desire for a fourth nationwide 5G network, following Verizon, AT&T and T-Mobile. “My sense is it will probably go through this time...it will be approved...because they do want a nationwide 5G network,” Scholar said.
This would also be good for Dish’s multitude of 5G suppliers. A more healthy Dish could prove to be a lifeline for 5G open RAN suppliers such as Mavenir.
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