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Dish And AT&T Announce Network Services Agreement

Today, AT&T and Dish announced that they are entering into a Network Services Agreement (NSA).1 Here’s the key bit from Dish’s press release:

[DISH announced a] Network Services Agreement (NSA) with AT&T, making AT&T the primary network services partner for DISH MVNO customers. Through this agreement, DISH will provide current and future customers of its retail wireless brands, including Boost Mobile, Ting Mobile and Republic Wireless, access to best-in-class coverage and connectivity on AT&T’s wireless network, in addition to the new DISH 5G network.

SEC Filing Insights

An SEC filing provides more insights than Dish’s press release. The deal between AT&T and Dish involves a minimum payment of five billion dollars over ten years.

DISH has agreed to pay AT&T at least $5 billion over the course of the ten-year term of the NSA, subject to certain terms and conditions.

People are already suggesting that Dish got a bargain by striking this deal for only five billion. They may be misunderstanding the arrangement. I expect the amount Dish pays to AT&T will depend on how heavily Dish relies on AT&T’s network. While five billion dollars is a minimum Dish, I think it’s likely Dish will end up paying more.2

Network Access

Dish has committed to activating a certain portion of its subscribers on AT&T’s network, but the SEC filing suggests Dish is permitted to activate some subscribers on other networks:

Under the NSA, AT&T becomes the primary network services provider for DISH, as DISH has committed to activate on AT&T’s network at least a minimum percentage of certain of its MVNO subscribers in the U.S. who receive services through a third-party network and to cause no less than a specified percentage of certain of its domestic roaming data usage for DISH’s MNO subscribers to be on AT&T.

Roaming

It looks like most of AT&T’s roaming agreements may be extended to Dish (emphasis mine):

AT&T will provide DISH with…services in all U.S. geographic areas…where AT&T or any AT&T affiliate has the right to use another wireless service provider’s network and is authorized to extend such right to DISH.
I’m unsure how often AT&T is prohibited from extending its roaming agreements to other parties. Further, it’s possible Dish won’t take advantage of some of AT&T’s roaming arrangements due to cost considerations.3

Prioritization

The SEC filing briefly touches on prioritization:

Under the NSA, AT&T will provide DISH postpaid and prepaid customers with similar quality of service as compared to certain AT&T postpaid and prepaid customers.
While the phrasing is vague, I expect it indicates Dish subscribers will have a QCI of 8 for regular data use on AT&T’s LTE network. That’s the same QCI for regular data received by the large majority of consumers on AT&T-branded plans.

Spectrum Use

Dish has extensive spectrum holdings that AT&T may take advantage of:

The NSA also provides an avenue for AT&T to deploy portions of DISH’s spectrum to support DISH customers on the AT&T network, by allowing AT&T the right, but not the obligation, to request to use portions of DISH’s spectrum.

Other Brands

The filing makes it clear that access to AT&T’s network is available for both existing and future brands under Dish (emphasis mine):

[The agreement provides] customers of Boost, Ting and Republic Wireless and all future DISH brands coverage on AT&T’s network.

Speculation

My hunch is that this deal is good news for both AT&T and Dish. For a while, I’ve heard people express skepticism about whether Dish actually intends to build its own network. I’m finding the skepticism less plausible as time goes on. With the backing of AT&T, Dish can focus on building out a 5G network in dense areas while offloading to AT&T for more extensive coverage.

The new agreement is probably bad news for T-Mobile. The company’s stock closed today a bit over 3% down from its opening price.4

Footnotes

  1. Dish previously had an agreement allowing its customers to access T-Mobile’s network. That agreement was formed when Dish bought Boost Mobile from Sprint. Both the agreement and the sale of Boost were intended to appease regulators overseeing a merger between T-Mobile and Sprint.

    I think the agreement between T-Mobile and Dish was set to last for about six more years. I’m not sure exactly how today’s deal alters previous arrangements between Dish and T-Mobile.

  2. The agreement stipulates some conditions under which early termination is possible. If the agreement is terminated early, I don’t think the minimum payment of five billion dollars will be required.
  3. Not a lot of details about pricing arrangements are disclosed in the filing, so it’s unclear to me how cost-prohibitive roaming may or may not be for Dish.
  4. The wider U.S. market, as well as stocks for AT&T, Dish, and Verizon ended down about 1%-2%.

3 thoughts to “Dish And AT&T Announce Network Services Agreement”

  1. Dish wanted Tmobile to delay shutting down Sprint’s CDMA network so Dish wouldn’t need to replace Boost customers’ phones. Is Dish planning on buying Boost customers phones compatible with ATT data bands? I doubt it. I expect Dish is hoping most Boost customers won’t realize their phones only support some of ATT’s data bands.

    1. I’m not sure how everything will shake out. I’m guessing Dish will offer services over more than one network for at least a few, maybe several, years. Dish could eventually subsidize basic, modern phones for some customers.

    2. AT&T has a very restrictive VoLTE list unlike T-Mobile who pretty much allows any VoLTE phone on their network so I suspect even more people will have to replace their phones than they would have with the switch to Sprint.

      I sure hope that Dish thought about that before signing.

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