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Dishing Out Mobile Predictions

Dec 21, 2017
Eddie Hold, President ;
Consumer Electronics , Connected Intelligence

It’s that time of year - presents are being wrapped, the weather is getting a lot colder, and we huddle up somewhere warm to start writing down our predictions for the New Year. And while we’ll get to more predictions in future blog posts, there’s a very large possibility for 2018 that deserves a blog unto itself. We expect that in 2018 Dish will make its move in wireless, finally mapping out what it intends to do with the large quantities of spectrum it has picked up over the past few years.

This is a pretty safe prediction in itself because Dish has to start using the spectrum by 2020 or risk having the spectrum pulled back by the FCC, as the auctions have a “use it or lose it” string attached to ensure that the spectrum doesn’t remain unused for too long. And last week, Dish announced a reorganization that positions the company to place more emphasis on areas other than the classic satellite TV, with Charlie Ergen taking on this initiative.

What is a far more interesting part of the prediction is what Dish will do with the spectrum, and whom we suspect the satellite company may partner with. But before we get to the partnership component, it’s worth looking at what Dish has previously said it plans to do with the spectrum. In a nutshell, the plan laid out to date is not for smartphones and tablets, but rather for the wonderful world of the Internet of Things. That is, we believe, a mistake. Or at least, it is when you think of IoT as being connected home devices (that mainly do not need a cellular connection) or the likes of smart meters (i.e., water, gas, and electric meters), with many utility companies having already determined their strategy and are busy installing these meters today. By the time Dish builds out the necessary network, most of the near-term market opportunity will have been tied up in long-term contracts.

A Prime Drone Opportunity

A more intriguing opportunity, if Dish does want to continue to pursue an IoT approach, would be to provide a cellular network to support drones, allowing for long-range management of these commercial devices. And any conversation about commercial drones tends to lead us to Amazon, which has led the way when it comes to drones as a form of delivery.

While many commercial drone opportunities may be somewhat localized, Amazon’s implied strategy around drones is far broader, both in terms of aspirations and geographical scope. To  support this, the company needs a comprehensive wireless strategy underlying the service. One potential option would be for Amazon to work with an existing mobile carrier, creating an IoT service-level agreement to support the drone needs. However, with Dish sitting in the wings waiting for its turn on stage, there’s a lot to be said for Amazon and Dish coming together to build the new wireless network in the form of a joint venture.

And there are a couple of ways this JV could work. It could simply be a JV that allows Amazon to support its drone strategy, or it could be a full-scale partnership, where the two companies combine forces in mobile to build something far greater, and with more of a consumer focus. The advantage of such a merging of assets would allow the combined force of Dish and Amazon to enter the mobile market in a far more aggressive way, creating a competitor that will threaten the current status quo.

I’ll leave you with a bit of a cliffhanger for today... in my next blog we’ll explore the potential for this joint venture in more detail and what it could mean for the U.S. mobile market.

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