Dish Network may be preparing to enter the wireless market as it announced on Friday that it would be selling convertible notes to raise $1 billion on top of the $5 billion it has on its balance sheets. According to a press release, the net proceeds are to be used for strategic transactions that may include those that are wireless and spectrum-related and for other general corporate uses. The unsecured notes will be sold to accredited investors and will be settled in cash, shares of Dish or a combination of both with the interest rates being determined between Dish and those who buy the notes.
The move comes at an interesting time for Dish as it purchased 700 MHz E-Block licenses in 2008. According to FCC rules, the company must meet the interim milestone of 40% signal coverage by the end of this month followed by the final milestone in March 2021 or the accelerated milestone of 70% buildout by March of 2020. The satellite provider plans to launch narrowband IoT, which is technology designed for the Internet of Things, to meet the deadline. Walter Piecyk at BTIG Research noticed on a document Dish filed with the FCC it plans to deploy a 5G capable network that would support IoT and said his company believes it doesn’t make financial sense nor would it be in the public interest to build 4G/LTE in the already crowded market. He also stated it would be cheaper to do 5G than building 4G from the ground up and wouldn’t have to worry about the burdens of backward compatibility. Dish has also said it plans to look for partnerships and will consider joint build partnerships if it will lower the costs. Dish is also bidding in the FCC’s incentive auction of a 600MHz spectrum which has been expected to wrap up sometime in March.
While it seems likely that Dish is prepping up to deliver on its milestones that it needs to meet, Piecyk said it’s too soon to jump to conclusions. However when you use the listed uses of the funds from the sale, couple that with the $3 billion it raised in August that had the same uses of funds listed it’s hard not to draw that conclusion.