Dish Network is raising billions and claims it plans to build a network from the ground up to serve the promising IoT market. But some analysts aren’t convinced.
The satellite TV provider said earlier this month that it plans to raise another $1 billion by selling convertible notes that will be settled in cash, shares of Dish or a combination of the two. The news follows Dish’s closing of a $3 billion offering of convertible notes the company announced in August.
Meanwhile, Dish is a bidder in the FCC’s incentive auction of 600 MHz, which is expected to wrap up in the next few weeks. And it recently said in an FCC filing that it plans to launch a narrowband IoT (NB-IoT) network to meet the FCC’s buildout requirements for the spectrum it already owns.
FCC rules stipulate that the satellite-TV provider must achieve 40% signal coverage on the 700 MHz E-Block licenses it purchased in 2008 by the end of the month, or reach a 70% buildout by March 2020. And Dish faces similar mandates for its licenses in the AWS-4 band.
But some observers believe Dish is just biding time, hoping to either settle on a buyer for its spectrum or partner with an existing service provider.
“We believe that despite the company’s recent filing with the FCC outlining deployment plans, they are ultimately pursuing a sale of their spectrum,” MoffettNathanson wrote recently in a research note. “Dish’s mid-band spectrum is viewed as perhaps the most likely acquisition candidate: the spectrum band is adjacent to, and therefore fits readily into, carriers’ existing band plans (depending on the carrier’s existing equipment, it’s possible that only a limited amount of new equipment is required; there are some ‘broad-band’ type of antennas in use today that cover the entirety of the 700 MHz to AWS frequencies; we would note that newer technology is more band-agnostic).”
Ken Schmidt of the consulting firm Steel in the Air echoed those sentiments on Twitter, saying he believes the NB-IoT network plans are “a ruse intended to reduce claims at M&A table that #Dish has to do something.” And William Ho of 556 Ventures tweeted that he was “cynical” of Dish’s claim it could launch commercial service by 2020.
It’s worth noting, though, that building an NB-IoT network wouldn’t be nearly as costly as developing a traditional cellular network. So it's conceivable that Dish could continue to move forward with its stated build-out plans, positioning its future network as complementary to existing networks as it tries to find a suitor or a partner.
“NB-IoT comes with promises to support broader coverage than other technologies,” Peter Jarich of Global Data said via email. “In part, that’s about IoT use cases (like underground parking). In part, that’s because NB-IoT is competing with LPWAN technologies, which claim they can cover a broad area with a small set of infra assets.
“So, what does it mean for Dish? I suspect it allows them to tell a story where they can deliver a broad range of coverage with fewer cells than they might need for non-IoT use cases.”