Dish Network signed a ten-year strategic services agreement which will make AT&T the network provider for its roughly 10 million MVNO customers, replacing T-Mobile US.
The agreement gives Dish Network access to AT&T roaming and transport services, which it will use to enable 5G services as it deploys its own facilities-based network.
Dish Network stated it will also employ the AT&T network to offer wireless service in rural markets where it currently provides satellite service.
John Swieringa, Dish Network COO and group president of retail wireless, explained the deal will bring “enhanced coverage and service” to users of its Boost Mobile, Ting and Republic Wireless MVNO businesses.
AT&T last week announced its 5G network covers 250 million people in the US, a milestone Dish Network cited as a positive for its customers.
The operator owns Dish Network’s top competitor in the satellite business, DirecTV, and is in the process of spinning off 30 per cent to TPG Capital.
Terms of the deal allow AT&T to access Dish Network spectrum for its own customers in select markets.
At a price
In documents filed with the US Securities and Exchange Commission, Dish Network stated it will pay AT&T at least $5 billion over the term of the agreement.
Colby Synesael, senior equity research analyst at Cowen and Company, estimated Dish Network is likely to pay AT&T more than $500 million annually during the early years of the agreement, with payments declining as the nascent operator is able to rely more on its own network.
Snynesael added the deal seems to reflect Dish Network’s frustration with T-Mobile.
T-Mobile is urging the Federal Communications Commission to re-auction licences in the 12GHz band, which Dish Network holds a number of and currently uses for satellite services, though had pressed the regulator to clear for 5G without an auction.
In addition, T-Mobile plans to shut its CDMA network pose a threat to some Dish Network customers.
Dish Network is in the process of building a cloud-native open RAN network, with wireless handled through its MVNO business, which it built through the acquisitions of Boost Mobile, Ting and Republic Wireless.