Dish Network, having cumulatively invested or financed at least $26 billion in wireless-related assets during the last 12 years, is under mounting pressure to squeeze revenue out of its mobile aspirations.
The company finally became a genuine player in the U.S. wireless industry last month when it closed its $1.4 billion purchase of Boost Mobile to operate as a mobile virtual network operator (MVNO), but monumentally difficult and expensive work remains.
“This is an execution risk company right now,” Dish co-founder and Chairman Charlie Ergen said during the company’s second quarter of 2020 earnings call.
Indeed, Dish argues it has the team in place to build a nationwide cloud-native, virtualized open radio access network (RAN), and it recently inked deals with Altiostar, Fujitsu, Mavenir, and VMware to begin putting the infrastructure in place.
Outstanding questions abound, however. Will it meet its goal of deploying a single 5G market this year? “We haven’t given up on that. We’re waiting on prototype radios and hopefully we’ll still have a market up this year,” Ergen said.
Dish Holds Firm to $10B for Network Buildout
Can Dish build a nationwide 5G network with $10 billion? Ergen and his team of executives aren’t backing off that estimate, but many industry analysts remain skeptical.
“We have visibility into promising cost curve improvements,” Tom Cullen, EVP of corporate development at Dish, said when pressed on this issue.
“The promise of O-RAN is actually lowering the capital cost of deployment. Because you’re able to break apart the proprietary traditional system, we’re getting radio pricing that is a fraction of what a typical radio historically has cost,” he said, adding that silicon advancements during the next 18 months will drive costs down further.
“On the opex side, as you’re seeing orchestration become more mature, for instance with VMware as part of the solution that we negotiated with, the orchestration layer has an opportunity to significantly lower traditional opex associated with wireless,” Cullen explained.
Ergen, in closing the discussion on that point, said “people who discounted that number and said that was an impossible number to build a network, I think you’ll start seeing real data that says … that number is becoming more and more realistic.”
Dish’s Future Rides on Open RAN
Dish has a lot riding on open RAN, a technological framework that aims to disaggregate the hardware, software, and various components that comprise network architecture. “We’re committed to the O-RAN architecture. We’re the only company in the United States that we know of that’s doing that,” Ergen said.
“We now are incredibly skilled in O-RAN, cloud-based architecture for the next generation of telcos, so we’re unique in that sense and the focus is how do you put those assets together to have good services that consumers, businesses and enterprises will pay for in order to get a return on our investment, and obviously we have a huge investment in telco today,” he said.
The shift in technology is “dramatic” and “not understood by most people,” Ergen added, claiming early technical concerns around vendors and open RAN radios have been resolved.
Fujitsu will later be joined by other radio vendors, but Dish hasn’t named those suppliers yet and the operator said it doesn’t expect to begin receiving those radios in scale until the second half of 2021.
“There is nothing that stops us from delivering the best network in the United States. There’s no law of physics, there’s no technology that we have to change, it’s really execution for us and our vendors to make it happen,” Ergen said. “We’re not reinventing science, we’re not reinventing anything. We’re just taking really good cloud providers and software providers and making what’s been a very clunky, hardware centric, highly operational cost environment, very similar to data centers 20 or 30 years, and we’re going to make that into a modern network.”
He added that Dish is relatively reticent to talk about its network strategy “because everybody’s going to be skeptical up until we light it up.” Meanwhile, the operator isn’t suffering from lack of interest among potential vendors.
Vendor Mix Narrows
More than 100 companies have responded to Dish’s various requests for proposals for different parts of the network build and it’s narrowed those choices down to two or three potential vendors for each remaining category, according to Ergen.
The operator is also “midway through completing radio frequency design for all the markets and having conversations with tower companies, both at the national level … as well as those second-tier tower vendors in order to build a portfolio of choices,” explained Dave Mayo, EVP of network development at Dish.
Dish also, as it runs against a deadline to cover 20% of the U.S. population in “one year, nine months, and 23 days,” as Mayo put it, is looking to initially deploy in markets where site acquisition, permitting, zoning, and leases can be more quickly assembled.
“We have a simpler radio design, we have a simpler antenna design than they’re traditionally using,” Ergen said. “The total weight will be less, the cabling will be less, the amount of real estate we need at the site will be less, so it’s another leapfrog in how you might design and deploy something. We’re hopeful that we can go pretty quickly once we get radios.”
Dish is barely one month old as an MVNO, but its aspirations certainly go beyond prepaid and postpaid smartphone services.
“There’s a huge wholesale opportunity. As we open a market and unleash 100 megahertz of mid- and low-band spectrum, we’re going to have so much more capacity than we need for pre- and postpaid,” Cullen said.
“With the Huawei push coming out of D.C., there’s quite a bit of support for O-RAN and the desire for a U.S.-based telco ecosystem. We’re getting inbound activity from every major technology company in the United States whether that be enterprise-focused companies or cloud-based companies,” he said.
“The progress that we’ve seen over the last five to six months around automation, network slicing, and the ability to sell wholesale capacity has been tremendous. In our minds now it’s inevitable and it’s undeniable that O-RAN will be part of the landscape and the wholesale wireless opportunity is much much larger,” Cullen said.
“The fact that an enterprise can have a slice of our network and be able to have their down data, and their own security, and look like their own network, for a while that’s going to be one-of-a-kind,” Ergen said.
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August 08, 2020 at 07:00PM
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