What: DISH and AT&T signed a long term network service agreement making AT&T the primary network for its DISH MVNO brand (Boost Mobile, Ting and Republic Wireless) customers.
Though the terms were not disclosed in the DISH SEC 8-K filing, the media reports point to 10 years and worth at least $5 billion. Moreover, the agreement allows AT&T to use a portion of DISH's spectrum in various markets to help support DISH's customers on the AT&T network. Lastly, AT&T is providing transport services to support DISH's 5G network.
Why: DISH needed to exit/held hostage to an acrimonious T-Mobile relationship prompted by the announced CDMA network sunset by January 2022. The sunset would require DISH to convert (read handset subsidy) those legacy CDMA subs to newer compatible devices.
When: That is an unknown on the rollover of these customers. However, it's likely before the end of 2021.
Impact:
- DISH
- Gets out from under the T-Mobile thumb/control despite favorable ostensibly wholesale rates when it took over the Boost branded base
- Likely to receive an incentive monetary sum to assist DISH move subscribers onto AT&T network
- Gets out of direct device subsidies of those CDMA subscribers; could use that incentive sum to help offset those devices
- Possibly gets access to AT&T device relationships to drive down DISH's subsidy costs (near term and future) as well helping to pad the device offerings
- Ostensibly, this AT&T wholesale deal would provide better monetary terms/outcome for DISH in order to exit the T-Mobile relationship
- Allows DISH to bundle wireless service with its own satellite television service (double play) allowing for increased ARPU and growth in rural communities it currently serves
- T-Mobile
- Loses wholesale revenue from '22 onward though the T-Mobile should have factored in DISH's 5G network buildout projections and worse case planning given the increasing symmetrical war of words
- Loses a customer/partner that is increasing hostile (the T-Mobile Grinch commentary). That could be construed as a good thing.
With 'renting' some of DISH's 600 MHz spectrum that allows for T-Mobile's vast national 5G claims, DISH could opt to terminate the spectrum leasing and leave T-Mobile with future 600 LTE & 5G coverage holes.T-Mobile and DISH came away with a 42 month lease arrangement back in late '20.
- AT&T
- Gains future wholesale revenue, presumably for 10 years, and takes it away from arch rival T-Mobile
- Gains access to DISH's spectrum in certain markets
- Though the primary purpose was to support DISH's customers, what's to stop AT&T to also support AT&T customers?
- Markets were not identified but likely in dense urban markets where Boost subscribers consumer service
- Unclear whether this is relegated to just LTE connectivity or future 5G as DISH would logically have its own national 5G owner's economics
- Gets near term and future transport revenue for DISH's 5G buildout. This would help with some return on investment (CapEx) on the company's big multi-year fiber push and buildout
- Allows DISH to blunt T-Mobile rural growth as a viable competitor (if DISH can execute)
