Phones Canada has been closely monitoring the ongoing story involving Dish’s option to purchase 13.5MHz of low-band 800MHz spectrum from T-Mobile. This option was initially granted to Dish as part of the agreements between T-Mobile and the FCC to approve T-Mobile’s acquisition of Sprint.
Originally, Dish had until June 30th, 2023, to pay T-Mobile $3.59 billion for the airwaves. However, due to financial constraints, this deadline had to be extended. After negotiations, Dish provided T-Mobile with $100 million towards the purchase in exchange for a new deadline of April 1st, 2024 – coincidentally marking the fourth anniversary of T-Mobile’s acquisition of Sprint.
In a recent SEC filing, Dish disclosed that it is unable to secure the financing needed to meet the $3.59 billion payment by the revised deadline. As a result, Dish stated that it no longer believes it will exercise the option and has reduced its value to zero.
While this development may not significantly impact Dish, according to Recon Analytics analyst Roger Entner, as the amount of spectrum covered by the option was not substantial enough for additional capacity or services.
The combined Echostar/Dish Network also expressed doubts about its future viability in the SEC filing. With debt maturing in 2024 and anticipated cash burn over the next year, there are concerns about its ability to continue as a going concern.
Dish recently reported a loss of 123,000 prepaid subscribers in Q4 of 2023, significantly higher than previous quarters. MoffettNathanson analyst Craig Moffett pointed out that Dish’s business appears to be heading towards bankruptcy due to these challenges.
Moffett emphasized that neither Boost’s prepaid business nor its fledgling 5G business seems sustainable in case of bankruptcy. He suggested that spectrum salvage value might be Dish’s primary asset in such scenarios.
