This week, T-Mobile, Sprint and Dish have all been in court, attempting to persuade a number of State Attorneys’ General to approve the merger between the latter two carriers.
Many State Attorneys’ General believe that Dish wouldn’t be able to replace Sprint as the fourth carrier in the nation. But Dish co-founder and CEO, Charlie Ergen seems to believe otherwise. Ergen said during the trial this week that Dish would be able to compete with the three other wireless carriers from day one.
The reason for this is because Dish is going to be building a 5G network, that would compete with the other carriers.
Ergen says not building a 5G network would be “financial suicide”
Dish’s Ergen is not wrong either. In order for Dish to compete with T-Mobile, Verizon and AT&T, it does need to build a 5G network. Sure Dish is going to have the ability to use the Sprint/T-Mobile merged network for a few years, as part of the merger, but they are still going to need their own 5G network.
Ergen has said that he has secured funding from three banks that would help build out its 5G network. The funding currently totals $10 billion.
Dish already has a ton of spectrum that it has been acquiring over the past decade or so. While the majority of that spectrum won’t be great for 5G, it is a start for Dish. And remember that 5G isn’t available for a specific set of spectrum either. So Dish could use it on its existing spectrum too.
Dish will offer lower prices than what’s currently available
And that’s going to make many State Attorneys’ General happy. Ergen stated that it is going to offer lower prices on phone plans than what its competitors are currently offering.
Now how exactly would Dish be able to do that? Likely subsidizing from its satellite TV customers. But also the fact that carriers make a ton of profit on every single subscriber that it has. Even though T-Mobile charges $70 for unlimited everything, it doesn’t mean that it costs them anywhere near that much to keep their network running and support these devices.
One of the big reasons that regulators are worried about Sprint and T-Mobile merging is competition. They are afraid that prices would go up with less competition. But Dish is making sure that won’t happen. And that could be enough to get these State Attorneys’ General to drop their cases.