Tower companies now own Dish's abandoned 5G radios – and SpaceX might become a buyer

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The tower companies (towercos) now own Dish Wireless' abandoned 5G radios and antennas, says American Tower CEO Steven Vondran. This could feed into SpaceX's mobile ambitions, analysts say.
The tower companies now own the equipment that Dish Wireless left behind after it abandoned its national 5G network, American Tower President and CEO Steven Vondran revealed Tuesday on the company's Q3 earnings call.
Some analysts believe this scenario could play into the hands of SpaceX as it threatens to move ahead with a plan to build a terrestrial wireless network that works in tandem with its satellite network.
"There is an abandonment order in the bankruptcy. So, yes, we own that equipment as of the date of that order," Vondran said on the company's Q3 call in response to an analyst asking about the ownership status of Dish's equipment and if others might be interested in acquiring it. "We do own it, and we can provide access to that to all interested parties."
This enters the picture after Dish Wireless claims it was forced to shut down its national 5G network after parent company EchoStar began to sell off spectrum to SpaceX and AT&T in the face of an FCC probe into the company's 5G buildout and spectrum rights. Dish Wireless then defaulted on payments to tower owners and other infrastructure partners, arguing that it was excused from those contracts because EchoStar's spectrum sales triggered a force majeure scenario. That prompted a deluge of lawsuits from Dish's erstwhile infrastructure partners, American Tower among them. At one point, EchoStar was set up as the stalking horse bidder (with a cash floor bid of $300 million) for the future sale of "substantially all" of Dish Wireless' assets.
Another analyst asked Vondran if a dispute about equipment ownership exists amid the legal proceedings with Dish Wireless, and if American Tower is in fact "free and clear" to sell that equipment.
Vondran reiterated as much. "No, we are good. We can do whatever we want to do with it," he said.
That could embolden SpaceX to swoop in as it explores a hybrid terrestrial-satellite network and a report that it's in talks with the tower companies to gain access to 80,000 mobile sites. This also comes as SpaceX makes plans to build out the 800MHz lowband spectrum it's acquiring from Grain Management that will enable SpaceX terrestrial signals to penetrate walls and buildings.
Having Dish out of the picture "is good news for SpaceX, which we have long argued should buy this year," LightShed Partners analysts Walter Piecyk and Joe Galone explained in this research note (registration required).
They likewise believe it's "bad news for Verizon's claim that a SpaceX network will take six years and half a trillion dollars."
That's in reference to comments made Monday by Verizon CEO Dan Schulman that downplayed the threat posed by SpaceX, pointing to the spectrum it will need alongside elements such as backhaul, customer service and backoffice systems. "There's no magic wand. There's no secret sauce. There's no shortcut," Schulman said when asked to address the potential impacts of SpaceX's moving into the core mobile business.
Still, the ownership shift pertaining to Dish Wireless' deserted radios antennas could open an important door. "SpaceX can now negotiate directly with the tower companies without waiting for bankruptcy mediation to conclude. More importantly, it takes [Charlie] Ergen [EchoStar's Chairman and CEO], a notoriously tough negotiator, out of the mix," the LightShed analysts added.
They note that the Dish Wireless radios at issue support the 2GHz and 800MHz spectrum SpaceX is acquiring from EchoStar and Grain.
"Buying compatible equipment already installed on towers could give SpaceX a head start on its wireless terrestrial network build and throw a big bucket of cold water on Verizon's four-to-six-year timeline and $300-$500 billion estimate for SpaceX's buildout," said the analysts.
They also believe that, in addition to buying compatible radios, SpaceX should start to sign up new tower leases as a "starter kit" that could accelerate its terrestrial network ambitions.
Analysts are unsure that SpaceX will need 80,000 traditional cell sites to fulfill its terrestrial buildout given its planned use of a direct-to-device (D2D) overlay and femtocells.
"It's possible that the 80K sites are not all macrosites, but instead include some small cells mounted on traditional tower infrastructure or rooftops (though small cells generally don't match up well with these locations)," MoffettNathanson analyst Nick Del Deo said in a research note. "This could be a long-term site count rather than a near-term one, with tower deals simply contemplating that ramp over time."
Vondran declined to comment about any possible talks underway between American Tower and SpaceX. But he did acknowledge that the company is "really excited about the prospect of maybe having a new customer at scale in the US" and is likewise "encouraged" about SpaceX's stated plans.
"But you should assume that anybody who wants to build a network in the US at scale is going to come to American Tower as one of their premier tower vendors, if not the premier tower vendor," Vondran said. "We have an unmatched portfolio in the US in terms of where our sites are located, the quality of those sites, and we can get them on air faster than anybody else. So, we should be the first call that everybody makes."

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