Dish Chairman Says Phase Two of 5G Network Will Cost $10 Billion

(Bloomberg) -- Dish Network Corp. Chairman Charlie Ergen put a $10 billion price tag on a second phase of wireless-network construction, advancing plans to use the company’s stockpile of airwaves for fifth-generation technology.

While Ergen offered few specifics during a presentation at an industry conference in Charlotte, North Carolina, on Wednesday, he said the $1 billion first phase is underway, and the second 5G phase was being planned.

Having missed chances to pair with wireless network operators T-Mobile US Inc. and Sprint Corp., which have agreed to combine in a $27 billion deal, Dish is under pressure to find some other way to capitalize on the $40 billion worth of airwave licenses it has accumulated. Turning the vacant airwaves into a working network is the more costly solution, but Dish is running short on time.

The company could lose airwave licenses if it doesn’t use some of the spectrum by March 2020. Bowing to those use-it-or-lose-it rules, Dish took the first step by moving ahead with plans for an “internet of things,” a narrow-band network to connect machines, devices and sensors. The remaining spectrum also faces must-use deadlines.

In an era of video-hungry mobile subscribers, Dish’s spectrum could offer carriers like AT&T Inc. and Verizon Communications Inc. an ample supply of capacity for the right price. But the more Dish spends on network equipment and cell-site tower leases, the more expensive a takeover will be for a capacity-strapped carrier.

“Ergen is a consummate poker player,” Craig Moffett, an analyst with MoffettNathanson LLC, wrote in a note on Wednesday. “So perhaps all of this is simply a way to ‘force’ the issue of a spectrum sale before he enters into even more tower leases.”

Dish shares fell 3 percent to $31.02 at 3:01 p.m. in New York. The stock had already declined 33 percent this year through Tuesday’s close.

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