DISH strikes $5BN deal with AT&T for 5G, MVNO coverage

• DISH Networks has struck a services deal with AT&T
• AT&T will provide connectivity for DISH mobile customers where DISH does not have coverage
• Agreement expands DISH’s services reach into rural areas
• DISH will pay AT&T at least $5 billion over the next 10 years
• MVNO part of the deal marks a wholesale loss for T-Mobile US

DISH Network has struck a deal with AT&T that will see the giant US national operator provide mobile connectivity services for Dish’s MVNO brands such as Boost Mobile, Ting Mobile and Republic Wireless, as well as provide roaming services to DISH 5G customers once the operator launches its competitive service in the coming months. The deal is worth at least $5 billion to AT&T over the course of the 10-year deal, according to this SEC filing.

DISH is in the process of building out its own Open RAN-based 5G network that, to meet license requirements, will need to cover at least 70% of the US population by 2023. The company is set to launch in its initial 5G service in Las Vegas at some point in the next few months (or even weeks!) and, once that happens and customers start to sign up, they will want access to mobile voice and data services wherever they are in the US and that’s where the roaming agreement with AT&T (which is also providing DISH with network transport services) comes into play.

The deal also makes AT&T the supplier of connectivity for DISH’s MVNO brands and “accelerates DISH's expansion of retail wireless distribution to rural markets where DISH provides satellite TV services,” the partners announced in this press release. All three of DISH’s MVNO operations currently run on T-Mobile US’s network, so the deal with AT&T signals a wholesale loss for its rival.  

DISH makes a big deal of AT&T’s 5G reach, which will be an important selling point to support its 5G services packages while it builds out its own infrastructure: “AT&T 5G is available to 250 million people across the country over sub-6 spectrum and millimeter wave spectrum (AT&T 5G+), which is currently available in parts of 38 cities and at more than 20 venues, including high-traffic places like stadiums, arenas, airports and campuses. AT&T plans to cover 200 million people across the country with C-band (mid-band) 5G by the end of 2023," notes DISH in its announcement.

The agreement also allows AT&T the opportunity to use a portion of DISH's spectrum in various markets to help support DISH customers on AT&T's network.

The SEC filing lists the situations under which the network services agreement could be terminated by AT&T, including a change of ownership at DISH (or insolvency). 

DISH will have built a model of the likely annual costs it will need to pay AT&T as it signs up 5G customers and builds out its network, and as its infrastructure roll-out is ‘front-heavy’ in terms of population coverage, it should be crippled by unexpected 5G roaming costs during the next few years in the same was that Rakuten Mobile experienced in Japan as a result of its network services deal with KDDI: In that instance Rakuten accelerated its own network rollout dramatically after it realized just how much cash it would handing to KDDI over a six-year period. 

Now both parties will wait to see just how much traffic AT&T will carry for DISH: The MVNO model will be far easier to predict and plan for than the 5G roaming and transport services part of the agreement – DISH will be hoping it has millions of 5G customers within its first year of operations but, of course, the incumbent trio of 5G service providers – T-Mobile US, Verizon and, of course, AT&T – will all have special offers up their sleeves to deter customers from switching to DISH.

Another unknown, of course, is just how DISH’s 5G service will perform as it is using the as yet untried model of an Open RAN 5G access network hosted on a public cloud platform (with AWS as the host) coupled with cloud native operations: The next 18 months are going to be very interesting for US 5G market watchers. (See Dell to serve Dish at the edge and Nokia and DISH to deploy first 5G standalone core network in the public cloud with AWS.)

- Ray Le Maistre, Editorial Director, TelecomTV