What is Dish Nework's Biggest Revenue Opportunity in High Speed Access?

DirecTV and Dish Network have made different decisions about their video assets.

DirecTV decided the time to remain a stand alone provider of satellite TV was ending, and agreed to sell to AT&T.

Dish Network believes it can make a transition to triple play provider by getting into the mobile and perhaps fixed wireless businesses, with “a pretty clear path to actually grow the business.”

Those decisions reflect the fundamental strategic danger for the U.S. satellite TV business, namely the shift to triple play offers as the core retail product.

As telcos and cable TV companies after 1996 began transforming themselves from “single-purpose networks” to “multi-purpose networks” able to deliver any media type, and thereby drawing from multiple revenue sources, satellite networks have struggled to keep up.

To some extent, satellite providers have added separate “satellite broadband” fleets, but most observers would say that market remains a niche, and a precarious niche as fixed network speeds start to climb into the range between 100 Mbps and 1,000 Mbps retail offerings often priced no more than 15 Mbps satellite offers.

But most observers would say satellite networks will be quite challenged, going forward, as triple play platforms.

“I don't think anything's changed in terms of what we've been saying for the last three or four years, which is the pay TV business... is a mature business,” said Charlie Ergen, Dish Network CEO. “It continues to, in a way, surprise us that it has held up as well it has.”

Over the top video is one of the growth avenues, Dish Network believes.

“The second thing is broadband and general satellite broadband, first and foremost,” Ergen said. “We think that the fixed broadband business is, we're cautiously optimistic that that's a real business.”

Assuming satellite broadband remains a niche, primarily attractive to one to three percent of U.S. homes, the bigger opportunities would come in the mobile broadband and perhaps fixed wireless high speed access areas.

That is why there is logical and persistent thinking that Dish Network will make a bid to buy T-Mobile US, a way to buy assets Dish needs to put its mobile spectrum into play and get into the mobile broadband business.

How big an opportunity the fixed wireless business might be is not so clear. The issue is not whether that will work. ISPs all over the United States--and AT&T in the event its DirecTV acquisition is approved--do so routinely.

The issue is how big a business opportunity fixed wireless might be for Dish Network. One suspects that, as with satellite broadband, the revenue upside is more limited than the mobile opportunity.

If it acquires T-Mobile US, that network will scale more efficiently, have the largest potential customer opportunity, and offer the greatest degree of packaging synergy with the existing linear video business.

Owning a high speed access network also will mesh with the OTT video push, as well.