uploads///T AWS auction

Why Did DISH Network Buy Spectrum?


May. 18 2017, Updated 7:36 a.m. ET

DISH’s spectrum buy

Last month, DISH Network (DISH) was the second-largest spectrum buyer, spending $6.2 billion at the FCC’s (Federal Communications Commission) 600 MHz (megahertz) auction.

Other major buyers at the broadcast spectrum auction included T-Mobile (TMUS), AT&T (T), and Comcast (CMCSA), which spent ~$8.0 billion, $910.2 million, and $1.7 billion, respectively.

Wireless spectrum licenses have been valuable assets for DISH. Since 2008, the company has invested ~$5.0 billion in acquiring these licenses. DISH holds spectrum licenses for the AWS-4 (advanced wireless services) and H-Block spectrums.

DISH was asked about its recent 600 Mhz spectrum buy and what it meant for the company on its 1Q17 earnings call. DISH stated that it intended to buy the 600 Mhz block of spectrum nationwide because it was a low-band spectrum that would provide better propagation.

The company added that the spectrum buy would also help it to transition into a connectivity company with the IoT (Internet of Things), and its intention was to venture into providing 5G (fifth-generation) technology services.

DISH also didn’t completely rule out selling some of its spectrum to buyers such as AT&T in the future. AT&T had opted out of bidding at the FCC’s 600 Mhz auction.

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AT&T has been an aggressive spectrum buyer in the past

AT&T was the highest bidder during the AWS-3 spectrum auctions in early 2015, purchasing spectrum worth $18.2 billion. The AWS-3 spectrum auction was the major auction conducted by the FCC after 2008.

As we can see in the graph above, Verizon and T-Mobile also participated in the auction, making winning bids of $10.4 billion and $1.8 billion, respectively.

DISH makes up 0.07% of the SPDR S&P 500 ETF (SPY). SPY has an exposure of 4.4% to the computers sector.


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