Dish Can Handle T-Mobile/Sprint Costs, Wireless Network Less Clear, S&P Says
Dish Network likely can absorb the $5 billion price tag of Sprint's prepaid business and spectrum licenses, S&P said Tuesday, but added it was keeping its negative outlook on the company based on the pay-TV industry pressures, uncertainty about how…
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it plans to finance its wireless network build and the challenges of entering the competitive wireless market. It said Dish has $1.5 billion in cash on hand, but it likely will access capital markets to fund the purchase, and that borrowing "pales in comparison to the $10 billion Dish requires for its planned wireless buildout." It said bundling prepaid wireless with pay-TV has some challenges, such as thin profit margins for mobile virtual network operator agreements and that Sprint's Boost customers are mostly in urban areas while Dish's direct broadcast satellite customer base is largely rural. It said Dish's lack of wireless experience makes it difficult to compete against established players, and while IoT presents notable long-term revenue opportunities, its use cases are more than five years away. It said Dish's wireless ambitions will likely require a partner and substantial capital. Other Dish and wireless watchers also said the company faces significant challenges in becoming a competitive wireless carrier (see 1907290019).