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The recently announced MVNO deal with AT&T will make Dish a much stronger competitor, according to a new report from Craig Moffett and other researchers at financial research firm MoffettNathanson. Without the AT&T deal, Dish likely would have gone bankrupt, the researchers argue.

Dish had an MVNO deal with T-Mobile that was due to expire in 2027 and was unlikely to be renewed, the researchers argue. And according to the researchers, it would have been difficult for Dish to build out nationwide coverage, defined as covering 95% of the U.S. population, by that date.

“To provide a competitive service to any representative group of users requires a nationwide network,” the researchers wrote. “Coverage of 95% or so of thee population is table stakes.”

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The AT&T deal is for 10 years and may have a greater likelihood of being renewed, which gives Dish more time to build out its network and may even eliminate the need to build to 95% of the population.

“With the AT&T deal, Dish will rely heavily on AT&T’s network in rural markets, perhaps indefinitely, where the cost of deployment is relatively high and return on capital low,” MoffettNathanson predicts. “Like cable operators, Dish can now focus on network buildout only in the densest areas, where ROI is high, and can rely on their MVNO deal everywhere else.”

Importantly, the Dish AT&T MVNO deal also extends beyond Dish’s six-year prohibition on a sale of the company or its spectrum to an incumbent wireless operator.

“The window for Dish afforded by the MVNO agreement now extends at least five years beyond the sunset of the sale prohibition,” the research note explains. “That not only gives Dish more time, it also means that a potential buyer can no longer wait for imminent bankruptcy to try to secure Dish’s spectrum on the cheap.”

Because the AT&T deal makes Dish stronger, the company also may now be more attractive to a potential strategic investor such as Amazon, the researchers note.

Dish still faces significant challenges, however, including meeting FCC requirements to build out its network to 70% of the U.S. population by 2025 and potentially losing customers when T-Mobile shuts down its CDMA network. Many of the customers Dish acquired when it bought Sprint’s Boost Mobile prepaid business have CDMA phones and it is not expected that Dish will be able to upgrade all of them prior to T-Mobile’s planned early-2022 CDMA shutdown.

The AT&T deal doesn’t help Dish there because AT&T doesn’t have a CDMA network.

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