Whatever happens to the US operators in the current whirl of M&A, there are two wild cards in the mobile space – two possible new entrants, Dish and Ligado. Both are holders of spectrum previously assigned to mobile satellite; both have the potential to introduce a disruptive new element into the market, especially in the nascent Internet of Things (IoT) – if they choose to act boldly.
Dish is building an NB-IoT network in its 700 MHz spectrum, though while it has touted this as ‘5G’, in reality it is an affordable way to meet FCC build-out mandates. This leaves the market no wiser about whether Dish really intends to build a full mobile network, to support its own multiplay services and perhaps wholesale and IoT offerings – or whether its growing store of spectrum is purely a tradeable asset or a way to make Dish more attractive to an acquirer.
However, even to satisfy minimum FCC requirements, Dish will need help, according to a research note by Jefferies analysts, and this could be a catalyst to new alliances. FCC rules for the 700 MHz E Block spectrum which Dish acquired in 2008 gave it two options – reach 40% coverage by the end of the first quarter of 2017, or 70% by March 2020. Dish, clearly, opted for the second option and has started work on NB-IoT, which has two advantages – it requires relatively little infrastructure, keeping costs down, and it could support emerging services and revenue streams, rather than duplicating existing networks. Dish faces similar mandates for its AWS-4 licences.
In a March filing with the FCC, Dish wrote: “We do not believe that it serves the public interest or makes business sense to build out a 4G/LTE network now that would duplicate networks already offered by the wireless incumbents, and subsequently require an almost immediate upgrade in order to be competitive. Instead, Dish plans to deploy a 5G-capable network, focused on supporting IoT … This network will not be burdened with a requirement to be backward compatible with legacy services.”
However, Dish will need partners to bring IoT offerings to market, argues Jefferies’ Mike McCormack, and is further hampered by delays in making its recently acquired 600 MHz spectrum deployable, and by legal action over its AWS-3 licences. “Dish is planning for a future 5G build that is unencumbered by legacy architectures, and expects that on a five-year horizon it will deploy the most advanced 5G network among its peers, though made it clear that it may take partners with technical and financial strength to bring it to fruition,” McCormack wrote.
While Dish casts around for allies, Ligado – the former LightSquared – is also focused on the IoT. Having emerged from bankruptcy protection, and settled almost all its disputes with GPS companies over potential interference from its network, it has reworked its business model around the IoT. But it is now under fire from satellite operator Iridium, which claims Ligado’s IoT services would “pose a far greater interference concern” to Iridium’s airwaves than satellite operations.
“Iridium’s technical concerns have been well documented and are consistent with, and supported by, FCC precedent and other relevant federal government technical working groups,” Iridium claimed in a filing with the FCC. “Far from being concerned about any competitive threat as suggested by Ligado, Iridium objects to Ligado’s proposal because of the potential for significant harmful interference to Iridium’s operations in violation of the FCC’s rules if Ligado is permitted to deploy a terrestrial service in the adjacent frequency band as currently proposed.”
Ligado has access to a nationwide block of 1525-1559 MHz spectrum in the L Band and wants to combine terrestrial wireless with its existing mobile satellite activities. Iridium claims the IoT devices are sure to come into contact with Iridium terminals and interfere with services supported by the new Iridium NEXT constellation.
Ligado responded: “We have confidence that the Commission can distinguish between fact and fiction and between the license modification and 1675-1680 MHz auction proceedings. We are also certain that the Commission will make a decision that is based on facts, science and the public interest rather than on rhetoric.”