Will Dish Network's NB-IoT Network Actually be Built?

When a wave of consolidation has finished in the U.S. mobile market, it is unclear where some assets--Sprint, T-Mobile US, Dish Network--will reside. In the case of Dish Network, it is unclear whether the firm remains independent (probably not), and what use will be made of its mobile spectrum.

Though there has been speculation that its lower-band spectrum eventually would augment another carrier's 4G mobile operations, it is perhaps possible that the assets will provide an overlay IoT capability as well. Much hinges on what happens over the next several months to a year.

Without much doubt, whatever asset changes occur will happen long before the stated Dish plan is completed. So it is possible the spectrum assets wind up, as expected, as part of another carrier's 4G spectrum resources, and the NB-IoT network is not built, at all. On the other hand, it might take three years for Dish to build such a network, so it has to begin some amount of work soon, to ensure any potential buyer the spectrum assets are viable, if Dish--or its spectrum--are not acquired in 2017.

So even as Dish Network is raising $1 billion in a bond sale, to build a narrowband Long Term Evolution (NB-LTE) network, it is not clear that actually will happen.

Dish says it use its spectrum licenses in the AWS-4 Band and Lower 700 MHz E Block to build a “5G-capable network,” focused on internet of things (“IoT”) apps and services, and expects to have a network built, covering 70 percent of the U.S. population, by March 2020.

Such a network essentially is a 4G narrowband network in a class with other low power, wide area (LPWA) networks designed to support sensor communications, not human users. NB-LTE is a “5G” network in the sense that it aims to support machine-to-machine communications, not in the sense of being part of the formal 5G standard, as such.

That has cost and performance implications. NB-LTE is optimized for low bandwidth communications (250 kbps downlink, 20 kbps uplink).

That helps clarify a key part of Dish Network’s wireless strategy, which is to avoid losing rights to its spectrum because it has not made meaningful progress towards building an actual network. It also is reasonable to assume that building an LPWA network will cost far less than building a full 4G or 5G network, so Dish keeps its asset safe, while spending less money to do so.

According to Federal Communications Commission rules, Dish has to activate a network with 40 percent signal coverage, using the  700 MHz licenses it purchased in 2008 (a deadline it will miss), or, alternatively,  reach a 70 percent buildout by March 2020. That latter target is what Dish now will have to meet. Similar requirements are in place for other spectrum Dish has rights to use.

By focusing on NB-LTE, Dish can claim it is building a network that does not compete head to head with the LTE networks operated by the other big mobile service providers, as NB-LTE aims to support machine-to-machine devices, not human end users.

Much still remains to be established. Dish has no special competence in M2M services and industries, and no operational experience with mobile services. It likely would need a partner to both build and provide retail services. Beyond that, the market size for M2M services is unproven, if considered the next wave in mobile revenues and Dish’s ability to gain enough market share also is unknown, given competition from several would-be nationwide IoT networks and IoT efforts by the other four major U.S. mobile service providers.

As always is the case when new platforms emerge, existing platforms and capabilities, as well as forthcoming technologies and features, are labeled in a way that makes them part of the future. That is the case with NB-LTE, which formally is a 4G standard.

On the other hand, the network’s stated purpose and ultimate use will be for LPWA devices, a class of applications considered the hallmark of coming 5G business models.