Dish and ATT sign wireless deal

Discussion in 'General DISH™ Discussion' started by juan ellitinez, Jul 19, 2021.

  1. juan ellitinez

    juan ellitinez Icon/Supporter DBSTalk Gold Club

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  2. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Gold Club DBSTalk Club

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    Dish Network said on Monday it had signed a multi-year deal worth at least $5 billion to make AT&T the primary network services partner for its wireless customers.

    Under the terms of the 10-year deal, AT&T will provide voice, data, messaging services to customers of Dish-owned mobile virtual network operators (MVNOs) Boost Mobile, Ting and Republic Wireless.

    MVNOs do not own networks but rent capacity from established operators to sell services to their customers.

    Dish’s retail wireless customers throughout the United States will also get access to voice and data roaming services on AT&T’s network, the company said.
     
  3. glrush

    glrush Cool Member/Supporter DBSTalk Gold Club

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  4. NashGuy

    NashGuy Well-Known Member

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    This deal with AT&T is a long-term lifeline for DISH, ensuring that they'll be a credible national player for at least a decade. They have to get their own 5G network built out to cover 70-75% of the US population by June 2025, which they can do with towers in densely populated metro areas. But the rural parts of the country, where the remaining 25-30% live, constitute many times more area than the metros, and that's where having AT&T (or Verizon) as a fallback is really important.

    Not sure whether this is such a great deal for AT&T, who's now fallen to third place among the big three wireless providers. It does give them some cash which they need badly right now, thanks to all the debt they've incurred from bad deals, but it's also helping to ensure that they have another significant rival. Good for us consumers, though!

    This is sort of like what Verizon has done with the Xfinity Mobile and Spectrum Mobile, both of which are really growing their sub bases. But those two so far are pure MVNOs, with all their traffic running on Verizon's network. I think both plan to build out their own spectrum in certain dense areas, and maybe also make better use of their own public wifi networks, so that they don't rely completely on Verizon's network. But I don't think either will build out networks anything close to what DISH must do over the next four years.

    As for a future deal to merge DirecTV and DISH (and maybe DirecTV Stream and Sling too), I think they'll definitely try. Just a matter of whether the DOJ lets it happen. Might require a long-term agreement to keep prices under certain levels, at least for consumers in rural areas who would be most impacted by seeing their cable TV choices drop from two providers to just one.
     
  5. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Gold Club DBSTalk Club

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    According to people familiar with the matter, Dish founder and billionaire Charlie Ergen reached the final stages of selling his company to AT&T in 2007. When he pushed for a last-minute change in terms, the deal fell apart.
    ...
    Choosing AT&T brings the companies closer together and further increases the likelihood that Ergen and AT&T Chief Executive John Stankey attempt a Dish-DirecTV merger down the road, according to Jonathan Chaplin, an analyst at New Street Research.

    Chaplin said in a note to clients that one of the biggest obstacles to a merger has been the notion that “AT&T hates Dish.” Some of those bad feelings stem from the botched 2007 merger, when AT&T felt Ergen had reached a handshake deal and negotiated in bad faith, according to people familiar with the deal who asked not to be named because the discussions were private.


    I don't recall the 2007 failed deal making the news before ... I could have missed it.

    As for DISH buying DIRECTV, I don't believe that is necessary. But perhaps this could be a sign of a warming of the relationship between AT&T and DISH and may lead to satellite license sales and cooperation between DISH and DIRECTV.

    Then again, it could be a case of $5 billion buying a little forgiveness. Income is more important than grudges. :)
     
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  6. NashGuy

    NashGuy Well-Known Member

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    Can't really see a plausible scenario where there's some kind of asset sale, or cooperation, between DISH and DTV short of the two businesses being merged under one company. I do think that company would likely be jointly owned by DISH and AT&T (with TPG possibly still holding a stake).
     
  7. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Gold Club DBSTalk Club

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    Short term, I believe the FCC would permit the transfer of some assets (the 14 transponder licenses and associated satellites) from DIRECTV to DISH. That would provide additional cash for the operation of DIRECTV while saving DISH from needing to lease the Canadian location at 129. Since DIRECTV has effectively abandoned use of 110 and 119 DIRECTV could remain effective competition to DISH without those licenses and not set off all of the red flags that a merger of the services would trigger.

    Long term, I believe the total number of satellite customers will need to drop considerably before the FCC (and other agencies) would see a merger as not having a negative effect on the marketplace. There is already enough competition on the streaming side ... Sling and DIRECTV Stream could merge and there would still be effective competition. But I don't see the FCC et al approving a satellite merger within the short term.

    I am looking at the situation from the perspective of what is possible. Eventually one company? Sure. But not soon.
     
  8. NashGuy

    NashGuy Well-Known Member

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    Yeah, I doubt the FCC would have a problem with any of that but I also doubt that such a deal is something DISH particularly wants or needs (especially if they believe, as Ergen clearly does, that the two businesses will eventually fully merge anyhow).

    Yeah, probably right on that. But the number of sat customers continues to drop. By 2023, after DTV has lost NFL ST, and further incremental gains have been made in rolling out broadband to rural areas, it's *possible* that we could see the current administration approve a merger with various conditions attached. But it very well may have to wait until 2025.
     
  9. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Gold Club DBSTalk Club

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    AT&T|DIRECTV has done the best they can at lowering their numbers. It has taken DISH over two years to lose a million satellite subscribers. Slackers. :D

    2Q 2021 was better (less net loss) for DIRECTV than 2Q last year so my estimate of when DIRECTV would lose its last customer through attrition has changed. Now 7-8 years away. Combined there are likely just over 20 million satellite customers today. At current rates numbers should slip below 10 million in five years. I'm not sure what the magic number is for "too big to merge".
     
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  10. NashGuy

    NashGuy Well-Known Member

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    Yeah, a combined DTV+DISH would definitely have more customers than Comcast cable TV, which has just under 19 million, making it the nation's largest MVPD. But I don't think that would be the main concern; I'd say the government would be more worried about eliminating competition for a slice of US consumers (10-15%) whose only choices for cable TV are DTV and DISH. Which is why I think that if the two were to merge, they would have to agree to some kind of price guarantee, at least in rural areas, such as holding their average price steady and tying future annual price hikes to the overall rate of inflation in consumer prices.
     
  11. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Gold Club DBSTalk Club

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    Being the only service of a type makes it more important that there are two services of that type until it is no longer possible to maintain both. The government may let two satellite systems merge if there was a third that would allow effective competition. They allowed DIRECTV to merge with USSC (no overlap in services anyways) and DIRECTV to buy PrimeStar (DISH remained competition). DISH was able to buy licenses from SkyAngel and Voom when they went out of business (DIRECTV remained competition).

    Today DISH has 8.6 million satellite subscribers, DIRECTV has 15.4 million Premium TV subscribers (11-12 million satellite?). Would each company having 5 million still be too big to merge? Would one company having 7 million and the other company having 3 million be a better mix for a merger? In my opinion, the lower the total number and the higher the imbalance the more likely the government will approve a merger.

    We are still years away from a merger being an issue. I wonder how much effect losing NFL ST exclusive will be on DIRECTV. Right now they need the billions of dollars more than they need the exclusive. There are those who thought DISH could not survive without RSNs. Losing HBO as a premium was also bad - but they still lost under one million subscribers over the past two years. Perhaps DIRECTV will easily adjust to life without NFL ST as an exclusive.
     
  12. NashGuy

    NashGuy Well-Known Member

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    Yeah, I don't think losing NFL ST is going to be absolutely ruinous to DTV's residential subscriber count (although it may be for their commercial sub count if they can no longer offer it to sports bars). But it will definitely hurt. I don't know how many residential subs they have that stick with DTV only because of NFL ST but it's not insignificant. Maybe 5%? 10%? Losing NFL ST as a promotional freebie to get new subs will also hurt their sign-ups.

    I feel like DISH has always appealed to consumers more on pricing, while DTV has been more the "premium" service particularly appealing to sports lovers. So I can see how DISH losing RSNs and HBO wouldn't hurt them as badly as the same things might impact DTV.
     
  13. glrush

    glrush Cool Member/Supporter DBSTalk Gold Club

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