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Possible 5G alliance between Amazon and Dish could prove a 'nightmare' for existing US carriers

By Adrian Diaconescu

Published: Feb 21, 2021, 4:17 PM

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Possible 5G alliance between Amazon and Dish could prove a 'nightmare' for existing US carriers

You may not remember this now, but Dish played a pivotal role in getting the long-gestating merger between T-Mobile and Sprint across the finish line. Said merger gave birth to a 5G juggernaut that almost instantly posed a real threat to the long-time wireless industry domination of Verizon and AT&T while simultaneously reducing competition by eliminating one of the market's top four players.

That's where satellite giant Dish Network came in, essentially vowing to take Sprint's fourth place in the US wireless landscape with the help of Virgin and Boost Mobile, as well as an extensive library of spectrum acquired from T-Mobile's new daughter company. Put simply, that hasn't happened yet, fueling the skepticism of many analysts who had warned against taking Charlie Ergen's word right off the bat.

The (foreign) beginning of a beautiful friendship?

Dish's chairman and co-founder is getting dangerously close to breaking at least some of the promises made to the FCC back in 2019, which wouldn't exactly be atypical for the shrewd businessman known for his penchant for hoarding wireless spectrum with little intention of putting it to good use.

While a brand spanking new 5G network is being built, this is clearly unlikely to cover 70 percent of the country's population within just two and a half years.

The real 2023 number could well end up being much lower than that at the current buildout rate... unless a deep-pocketed partner enters the equation at the right time. Rumored ever since Dish agreed to pay several billions of dollars for Sprint's prepaid businesses, Amazon's name is back in the news today.

Unfortunately, it doesn't sound like the two companies will announce their alliance very soon, as the e-commerce giant is merely planning to launch a "SIM service test" in an unspecified market outside the US at this time. While obviously unconfirmed, the news comes from Peter Adderton (via Seeking Alpha), none other than the founder of Boost Mobile America, who definitely qualifies as a well-connected insider.

Technical resources + money = success

Adderton has no skin in the US wireless game anymore, but his sources are probably as trustworthy as they come, so chances are Amazon will indeed test the mobile network operator waters somewhere outside North America soon. From there, Adderton seems to enter guesswork territory, predicting that an eventual partnership between Dish and Amazon would be a nightmare scenario for Verizon, T-Mobile, and AT&T.

Although Dish already has the (unfinished) infrastructure on which to build its intended "Netflix" of wireless networks to everyone else's Blockbuster, Amazon could provide the essential funding needed to rapidly deploy and expand said blazing fast 5G signal nationwide.

According to the vast majority of pundits, Dish has set a far too modest goal for its 5G network in terms of buildout costs, anticipating a total bill of $10 billion that could easily jump to double that number or even more. Naturally, Amazon has the financial resources to support that difference (and then some), and it may also have the motivation to enter a hugely profitable industry where Dish has a chance to cause "massive destruction of wireless carrier revenue."

While it's not entirely clear where this "destruction" might come from, Charlie Ergen has repeatedly touted a cost-effective network buildout strategy in the past relying exclusively on virtualization. That's not something the other, more traditional carriers can simply switch to without reworking the very foundation of their networks, making it easy (at least in theory) for Dish to beat their service prices... eventually.

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Adrian, a mobile technology enthusiast since the Nokia 3310 era, has been a dynamic presence in the tech journalism field, contributing to Android Authority, Digital Trends, and Pocketnow before joining PhoneArena in 2018. His expertise spans across various platforms, with a particular fondness for the diversity of the Android ecosystem. Despite the challenges of balancing full-time parenthood with his work, Adrian's passion for tech trends, running, and movies keeps him energized. His commitment to mid-range smartphones has led to an eclectic collection of devices, saved from personal bankruptcy by his preference for 'adequate' over 'overpriced'.