Every so often, over the past two decades, a company proposes a flexible, wholesale mobile platform in the USA, to open up the market for enterprise services to a wide variety of providers.
Clearwire pushed this idea when it was building a WiMAX network in the early years of the century. When it was acquired by Sprint, the larger operator – which had largely pioneered the MVNO model in the USA – kept the flame alive for a while, particularly when it formed a shortlived venture with several cablecos to create an alternative network and model to those of AT&T and Verizon.
Sprint reverted to LTE and a conventional approach, but Google was setting out visions of how a more open spectrum policy would enable a dynamic, on-demand platform to enable large numbers of service providers, on a far more flexible basis than the traditional, rigid MVNO contract. Versions of that idea continue to be put forward by the webscalers, but none has yet invested in creating the connectivity platform (though Microsoft and AWS are dabbling).
Then satellite provider LightSquared hatched the plan of running terrestrial cellular networks in its spectrum and supporting a wholesale-only model to enable enterprise service providers, in particular. That ran aground on regulatory barriers but Ligado, a new incarnation of LightSquare, continues to edge towards commercial deployment of wholesale 5G in its L-band airwaves.
The latest candidate to throw open the USA’s mobile enterprise market and disrupt the leading telcos is Dish Network. Its initial purchases of satellite and other spectrum were dismissed as pure investor speculation and it missed the boat to deploy 4G; but having acquired Boost Mobile as a by-product of the Sprint/T-Mobile merger, it now finds itself with customers, reasonably plentiful spectrum, and FCC 5G build-out obligations.
Merely building a network to add mobile services to its ailing pay-TV business is hardly likely to stack up as a business case, but Dish has several options open to it, each of which could be sweetened by a strategy partnership with a webscaler such as AWS, or a large cableco.
Initially, Dish looks set to aggregate several MVNOs (as Verizon has also been doing), having acquired Boost, followed by Ting Mobile, and now Republic Wireless, one of the early movers in offering low cost WiFi-first mobile services in the USA. This strategy has the benefit of bringing Dish some readymade customer bases, even if they are not very high value users, and so driving revenues through its network as soon as that is built out (in the meantime, its deal with T-Mobile includes a favorable MVNO agreement of its own for the Uncarrier’s network).
The Republic Wireless deal will bring about 200,000 customer relationships to Dish plus the brand and other supporting assets. Republic customers will not see any immediate changes to their service or plans, Dish promised.
Republic Wireless was founded in 2011 with a WiFi-first model in which customers were defaulted to a WiFi connection, only moving to (and paying for) cellular when there was no good WiFi signal. The cellular element was enabled by a MVNO deal with Sprint.
“Republic has created a loyal following and established a brand known for innovation, customer service and value. We plan to build upon that strong foundation,” said Dish COO and retail wireless chief John Swieringa. “As we continue to grow our retail wireless business, Republic broadens our existing customer base and positions us to deliver even more value to the market, expanding our portfolio of mobile solutions to meet a variety of customer needs.”
Enabling affordable services to low budget prepaid users and its own satellite TV base could even be profitable, if the open architecture Dish plans really does enable it to build a national 5G network for $10bn and to achieve very low operating costs. However, it is hardly an exciting business model on its own, and it would not add significant new choices for US wireless users.
Several Dish insiders are hinting that the next stage, perhaps in partnership with AWS, would be to enable a wholesale platform for enterprise and cloud service providers. This could build on the 5G sliceable core that Dish will implement from 2021, and together with the impact of the CBRS shared spectrum on enabling alternative providers, the USA’s mobile enterprise options could be shaken up in earnest.
The Republic deal could provide a first step. The transaction also involves Republic’s Relay division, which provides solutions for workers in hospitals, healthcare, education, facilities management and manufacturing. Relay will now become a wholesale customer for Dish’s 5G network, and will provide an important entry point to enterprise markets.
Relay’s model brings back memories of Nextel, whose anchor service was a push-to-talk device and network (similar to walkie-talkie) for enterprises. Relay has a 4G/WiFi device that is used by frontline workers who need person-to-person communications but are often out of range of the Internet. Revenue from the Relay Pro has risen by 1,600% since launch, according to Chris Chuang, co-founder and CEO of Republic Wireless.
Meanwhile, will Ligado finally fulfil the promise of its wholesale-only 5G vision? There is mounting speculation that, in fact, the company will sell its 40 MHz of L-band (1.6 GHz) spectrum to Verizon or AT&T, as it would be valuable to augment 5G uplink in the carriers’ planned C-band networks.
Verizon SVP Adam Koeppe threw cold water on the idea in an interview with Light Reading, saying Verizon would have sufficient site density to use C-band for both uplink and downlink. Of the Ligado spectrum, he added: “They’ve been peddling that asset for quite some time and nobody has pursued it, which speaks for itself.”
Analysts are less certain. Financial analysts at New Street Research told investors: “We have argued that the L-band is a valuable complement to a carrier’s C-band holdings. Ligado could easily enter into a lease for the L-band that would have minimal impact on near term cash flows and no impact on leverage.”
And Lightshed analysts concurred in a recent investor note, writing: “We continue to receive consistent and new incremental feedback from engineers about how supplemental uplink would speed the buildout of C-band spectrum and reduce the overall network density required to enable these higher C-Band frequencies. Investors should press Verizon on this very real issue.”