Dish Tries To Distract Everyone From Doomed 5G Network By Proposing Pointless Merger With Echostar

Failures

from the hey,-look-behind-you! dept

We just got done noting how Dish Network’s long-hyped 5G wireless network is likely doomed. While they’re technically building a “wireless network,” the network’s coverage, phone selection, and overall quality has proven laughable so far, and there have been growing worries that Dish is running out of cash.

Hoping to distract the press and regulators from this fact, Dish last week leaked word that they were considering a merger with satellite provider Echostar (spun out from Dish back in 2008).

Like so many U.S. megadeals the merger is a pointless one. Dish Network is saddled with debt, on the regulatory hook for a 5G network they’ll probably never finish, and is consistently bleeding not only traditional satellite TV subscribers, but the streaming video and wireless users its pivot was supposed to have been luring in by the bucketful.

Duct-taping Echostar to the side of this mess would be a giant distraction, likely result in pointless layoffs, and, outside of the stock bump and tax breaks, serves no technical function. And it generally smells like a desperation move from Dish CEO Charlie Ergen, who has a general reputation as an annoyingly and sometimes pointlessly stubborn negotiator and a bit of a cheapskate:

Ergen is as cautious and calculating in dealmaking as he was during his days as a professional gambler, when he was kicked out of a Lake Tahoe casino for counting cards. The sticky governance issues mean he would have to pay top dollar to get EchoStar, and he’s not known for that.

You might recall the Dish network was the Trump-era “fix” for the competitive erosion caused by the Sprint and T-Mobile merger. We noted back in 2019 that the whole thing was a doomed mess custom built by Trump-era “antitrust enforcers” as a flimsy way to justify additional industry consolidation.

Now the check’s coming due. While Dish has technically met the FCC’s obligation to craft a wireless network reaching 70% of the population (concentrated in a handful of major cities), the network reach, quality, and phone selection has generally been laughed at in terms of Dish being a valid player in the wireless space.

And it gets harder for Dish now. The next FCC-set benchmark is to reach 75 percent of the U.S. population by 2025, but that involves pushing into a lot more higher deployment cost rural and suburban markets. That’s hard to do when you’re running out of money and nobody takes your wireless play seriously (outside of a handful of telecom trade magazines whose ads and event funding rely on a cozy relationship with industry).

I still suspect this all ends with Ergen selling his vast troves of spectrum holdings and half-completed network to somebody like Verizon, and the FCC doling out a tiny wrist slap (if that) for Dish missing deployment obligations. And the Trump-era regulators that birthed this turd of a plan pretending the whole thing never happened.

The collapse will result in a bunch of layoffs and consumer annoyance. But everybody high up in the chain will have gotten what they wanted, ensuring nobody learns anything. Ergen gets a big load of cash from spectrum holdings that appreciated as feckless U.S. regulators were strung along for years. AT&T, Verizon, and Sprint see less competition. And Trump-era officials got the pointless consolidation they craved.

Filed Under: 5g, consolidation, fcc, megamergers, merger, regulators, telecom, trump, wireless
Companies: dish, echostar