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The allure of 4G wireless service has drawn in a number of new players, including satellite-TV provider Dish Network.
Dish applied yesterday for a waiver to the Federal Communications Commission that would allow it to use its recently acquired spectrum to build a wireless network, according to Credit Suisse analyst Jonathan Chaplin. The company plans to build a 4G LTE Advanced network, Chaplin said yesterday in a research note, adding that it has committed to a “realistic” build-out schedule.
The FCC application provides some clarity on what Dish had planned to do with a recent wave of acquisitions, which gave the company a valuable swath of spectrum and satellite assets. Satellite-TV providers have long coveted their own broadband pipe into the home, and Dish hasn’t been shy about trying out new opportunities. For example, it took over bankrupt Blockbuster and is attempting to revive the video-rental company.
Dish is one of several new entrants attempting to break into the wireless business, something that previously had been dominated by the traditional carriers.
A Dish representative wasn’t immediately available to provide more details to CNET. The company has hinted at plans to use the spectrum in the past, but has provided little detail.
An FCC representative also wasn’t available to comment to CNET on Dish’s application.
Earlier this year, Dish was able to scoop Terrestar and DBSD out of bankruptcy, allowing the company to get ahold of spectrum on the cheap. Yesterday, the company asked the FCC to allow it to combine the two licenses to create a network, which would combine both ground infrastructure and satellites, similar to LightSquared. Indeed, Dish cited LightSquared as precedent in its request for the waiver.
It’s unclear what commitments the FCC will seek from Dish. Chaplin said he is concerned that the FCC could require Dish to build a costly network. “As the application states, Dish is willing to commit to ‘certain substantial terrestrial network deployment commitments,'” he said.
Beyond promises of a nationwide network and coverage in rural areas, the FCC application provides little detail, according to Chaplin. He said the company’s best bet is to partner with a larger carrier such as Sprint to build out the network.
BTIG Research analyst Walter Piecyk noted that Dish’s plans are “quite paltry” and its choice to use LTE Advanced–an upgraded version of the current LTE not yet available–gives the company an additional loophole on timing. As such, he doesn’t believe the FCC will approve the application.
“If anything, Dish may have attracted unwanted attention to the lack of buildout requirements…they are attempting to acquire with or without a waiver,” Piecyk said in a blog posting (sign-up required).
Still, most expect this to be a long process.
“We look forward to learning more about the strategy because this first move does not seem to be a strong one if a quick approval is desired,” Piecyk said.
Dish is following in the footsteps of Clearwire, and more recently, LightSquared, in its desire to build a wireless network. The past instances have met with mixed results. Clearwire has a 4G WiMax network up and running, but faces a cash crunch and needs either money or a takeover to continue expanding and upgrading its network. Sprint is Clearwire’s largest customer and shareholder.
LightSquared, meanwhile, has recently signed up a number of new customers, including today’s announcement of a partnership with business service provider InterGlobe Communications. But the company continues to be dogged by concerns that its spectrum interferes with critical Global Positioning System equipment. LightSquared recently signed a deal for Sprint to host and manage its network.
Dish could use a shot in the arm. The company earlier this month reported another quarter of customer declines despite higher profit and sales.
Updated at 7:39 a.m. PT: to include additional background and analyst comment.
