Q1 2021 DISH Network Corp Earnings Call

Good day and welcome to the Dish Network Corporation Q1, 2021 earnings Conference call. Today's conference is being recorded and at this time I would like to turn the conference over to Tim Messner. Please go ahead Sir.

Alright, good morning, everyone and thanks for joining US we are joined on the call. This morning by Charlie, Oregon, and our Chairman Erik Carlson, our CEO, Tom Cullen EVP of corporate development.

Paul Orban, our CFO, and then and the wireless side, we have Steven and by our Chief Commercial Officer, Mark of one our Chief Network Officer, and also John Syringa, EVP and group President of our retail wireless business before we start and I need to remind you all of the statements that we make during this call that arent statements of historical fact constitute forward looking statements.

Those are subject to risks uncertainties and other factors that could cause our actual results to differ materially from historical results and ore from our forecast we assume no responsibility for updating forward looking statements for more information. Please refer to the risks uncertainties and other factors discussed in our SEC filings, we're not going to be making any opening remarks. This morning, so off.

Operator, well go straight to questions.

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All right folks sorry about that brief technical difficulties, but we are back and we can go ahead and start with our Q&A session. If you are the analyst. Please press star one to Q4 of question.

Again that is star one to ask a question.

Oh go ahead and pause for just one moment to allow everyone an opportunity to signal.

Okay.

Okay.

Okay. We'll go ahead and start with our first analyst question from Ric Prentiss with Raymond James.

Thanks, Good morning, guys.

Two questions if I could on the <unk> side of things first some of the other operators out there have suggested there could be some supply chain issues, possibly and then you guys have a fairly unique network build and you talked a little bit about how you're seeing the supply chain any concerns and the.

The rollout schedule.

Okay.

And unfortunately.

And as Charlie we didn't have day to the mayor of today, but.

Supply chain issues, we are seeing and Eric may speak to that we're seeing those issues across the board, whether it be and and our set top boxes for our traditional.

The dish TV to the handsets and and.

And the semiconductor so.

You know were.

But we're.

We'll work through that and and busy.

And as you always have obstacles and this is just one more of them and of course and the backdrop of of pandemic the doesn't help things, but but we focus on one of our task is at hand and we.

Management, and we just arm and precision as we see the conditions and so.

I think I think there is going to I think as a result of the pandemic and shortages and exit and the increased demand I think youre going to see that for a while.

Makes sense second question on the <unk> side, as we think the enterprise wholesale side of the business could be actually fairly exciting and significant opportunity help us understand what's you're hearing from customers as far as what do they need to see from you guys before they could make commitments or contracts is it vegas up and working is it a nationwide.

The network what are the customers wanted to see from you before they start making commitments and in line.

Right and wholesale enterprise could be significant.

And so just I'm just chart I'm going to hand, it over to Steven by who kind of runs that side of the business force but.

But and the context of it is is the first of all I think it's a big as the general statements of Big business I think it'll be good for all carriers because at the very nascent business today and and.

You can see and once you.

And once you can get into the enterprise business and do it a little bit different way, but it requires the different architecture to do it correctly and so maybe them and turn it over the Mark real quick and just give you a little architectural tutorial why what we're doing is different there and then maybe it goes to the Steve and I talk about the business opportunity.

Yes, the way to think of our cloud Native network is the network of networks.

And that's the way it's architected so when the customer comes to US it's easy for us to offer one sub network, which we can call the private network and Jeff techniques beyond that like slide seeing like automation and like software defined so I'm not going to go into the techniques, but nature.

Natively do where do you think of it is really the network of networks right and then Steven you're seeing that you're playing this.

The postpaid customers and they're telling you of Hollywood shape, those sub networks right.

Absolutely Yeah, no I think yes.

And we've talked to a number of customers.

Across multiple verticals and.

And different industry segments, and there's an increasing appetite and demand for the kind of network that we're building, which is really to enable them to have more security more control.

And also more visibility into the data that's coming off the devices. So that they control their business more effectively so we're seeing a terrific demand and the.

The network architecture of what we're putting in place actually enables and unlock that opportunity for those enterprise customers and.

It's again not restricted to any specific vertical we're touching a lot of different companies and a lot of different vertical segments across the country and the other aspect of the opportunity that we see for ourselves is that.

While we build out of nationwide network.

Our and the process of working with customers and prospective customers on private networks that are not limited by the geography of our national footprint. So we can deploy those.

Within their environments to support their business operations as well.

The demand, we're seeing is terrific and we're already engaged with the number of customers today.

Okay and.

Nationwide to place some of these contract and commitments and from some of these opportunities.

Exactly.

Okay. Thanks, guys.

Thank you.

Yeah and that is star one to ask a question and answer your question has been answered.

And by pressing star.

The next question is from David Barden with Bank of America. Please go ahead.

Hey, guys. Thanks, so much for taking the questions I guess.

And two.

Charlie you started your stock price move on.

And the AWS.

Client partnership announcement I was wondering if you could.

Or would be willing to opine on.

And what you think the the significance of that relationship is it is it just the business partnership or is it the beginning of something bigger.

And then I know, Dave on but Steven maybe.

On the Las Vegas build could you talk to us about.

What does that build look like what are you what are you going to do.

When is it going to happen what are you trying to get out of that in terms of showing people. What this network is capable of.

And you.

Okay.

Charlie on AWS. Thanks for the question.

As we've said for gosh as long as I've been doing conference calls.

We'd be partnerships, maybe a little bit different way than other people do but it's really it's really we want to work with committed companies that share our vision and that of that are helpful and making our company better and the return we're going to make their company better so the <unk>.

But we start and any we started and any any.

The partnership, particularly when it comes the technology and building the network as you have to start with best in class technology. So you would never compromise somebody else's.

<unk> billion of our investment and take a second and.

And take a secondary.

The network so we've.

And we've analyzed for for the.

For I've been working on a per five years, Mark Mark was really a lot more expert than I was put over the last 18 months, we've really been and with all of the cloud providers bid.

Big cost version and the good.

The news as are all very good and the United States is very Lucky Theres No question that the United States leads and cloud technology, but at the end of the day Amazon had the too big of a head start they jumped in really early.

They had they wanted to get in the telco space It was strategic for them.

And the cloud infrastructure as it existed a couple of years ago really didn't handle telco very well there's been a lot of.

Of R&D and investment.

The <unk> had to make the switch.

Transform their network and to something that they were of telco can operate and the cloud business is a little bit different and their traditional it infrastructure.

And the end of the day there.

We're best in class.

What we needed.

And whether it be their API and.

And the.

Documentation and discipline and.

And.

Vendor and the.

The community that supports them.

And there the developers and and then of course, obviously of reach into the enterprise business. So.

So that's the first and foremost and then the second thing I think is is is the company committed and and.

I'm not going to put words, and Amazon's math of I'll, let Jeff I'll.

And let them.

Talk to their commitment but.

They've done a lot of work for us to help us.

Without knowing where they would have of the deal or not and.

<unk> of the added I think it is helpful that Andy will become the CEO of because he is one of this project from the start and.

And he'll be able to move move all the pieces and within Amazon.

The focus on this and so I think at the end of the day.

I think we're going to be their largest customer.

And cloud and I think big and there may be the largest customer and our network, but we have to build the network and they have to build it and prove it.

The.

The other carriers around the world, including the United States will look at Amazon as a real leader here because.

We're just doing something different so.

And I say this the simple example, you got to look at it and we're building Netflix and the blockbuster of World.

So.

Netflix all of them.

Netflix did with the video and the cloud that's all of it.

When you sort of go into the physical store you put it in the cloud.

Alright, all of the business plans and the world all of the numbers all of the thought of it. They just did something simple they put it in the cloud and the technology was they were a little ahead of the technology, but the technology got they're all we're doing is taking all of those towers that you see as you drive down the highway basically put them in the cloud and.

And so instead of driving to the physical store and rent and the movie.

Youre going to get all your data and information and automation and everything from the cloud and so it's dramatic paradigm shift and the way.

Our network.

It's built and it should.

And it's an advantage over legacy carriers, you have 30 year old architecture, so they'll slowly good things and the cloud they'll put pieces of their network and the cloud, but they just can't.

Take it take it.

And just kind of take a front loader and move everything and the cloud at one time, so with that I'll turn it over maybe the.

Yes, so just in terms of what the Las Vegas Bill It looks like I think there are several attributes that are really important to what we're doing the build on Charlie's comment. One is we are building a cloud native infrastructure, we are using and open radio access architecture, but it's also of <unk> Native network, we're not trying to put five day on top of the.

<unk> and <unk> the infrastructure that we're deploying is optimized for <unk> and the way we've designed the network from and a retrospective and the deployment perspective is to take advantage of the <unk> as well as the <unk> platform and so what does that look like it's basically the new network. Its new infrastructure is designed using all of the.

The spectrum bands that we have and.

And the RF is optimized to take advantage of that.

And we're on a path to launching that and the third quarter, but it's one of a number of markets. We have coming on and we just have an analysis of market through the end of the year, but the first is obviously a number that we have and flight today and.

And we've got activity going on across the country to actually build out this network. So that'll be the first one of the people can touch and feel and get the experience.

But it is really of <unk> native network and.

And we've proven that Iran and from a technology.

<unk> and work.

And at the end of last year now we are and the execution phase now we are and the deployment phase and say Vegas. It will happened to be the first one that it will be of fully deployed market. The.

People will be able to touch and feel and experience.

And if I could just a quick follow up on that just real quick is is this is experienced is this going to be of business enterprise experience of our consumer mobile experience.

It'll be done and phases, but.

And the network is designed to support all customers across all segments.

I appreciate it thanks, guys I appreciate it.

Thank you. So the next question Scott is from John Paul.

Good luck with UBS.

Please go ahead great.

Yes. Thank you maybe Charles could you expand on the on the just on.

And the comment you just made that Amazon will be could potentially be your largest customer and meet our talk about sort of the go to market plans that may evolve for you to sell services into the into the AWS customer base and then.

Again back to the AWS deal I mean, obviously, it's got to help in terms of sort of time to market.

Capex.

Of our overall sort of cost total cost of service and say versus the <unk>.

Okay.

The original plan that you laid out sort of all of these issues is that sort of.

Can you build upon the.

The benefits that we were seeing or was that all contemplated.

And that you would strike a deal like this with AWS going forward. Thanks.

And your comments were correct the.

The AWS does help us with time to market. They do help us with Capex a lot of material of Capex.

Some of that does go to Opex right, so, but but the RF opex is still going to be with automation and are still going to be materially lower than it otherwise would have been so.

But they definitely and they help with expertise I mean, they have fabulous engineers that.

The invented the cloud and.

They are now, helping us and bent the telco cloud so.

All of that's good.

Yes, we anticipated the cloud native network from the beginning so the $10 billion total build out cost that we announced a couple of years ago. I think I think people are probably still skeptical. Some people are still skeptical, but you can see where we're headed that the.

Net debt most of your models, we will probably take.

Probably take well.

Several of the.

A lot of Capex off of the board when you understand the architecture and we're not going to go through all of the architecture and this is <unk>.

Paul but.

Certainly.

As a material impact on Capex.

Hey, John This is Tom I would just say, obviously, they've made massive investments over the years and compute storage and transport and edge will be sitting on top of that and as we tightly integrate telco into their infra and.

And then we can expose Apis to their development community, which we think makes and in.

Enables.

The third party.

Products and services to have network connectivity as well as the enterprise applications and you.

You can see.

And if we were if we were one of the three big and comments, where you have scale.

What we're doing might not might not make as much sense, but realize we're starting with the very low customer base of $9 million. So.

On a variable cost and just makes more sense, but having said that from from that we'd still would do it because of the technology of what we're doing with the fact that.

The fact that you have your data stored and me and you can now analyze it and the fact, you can automate and use machine learning artificial intelligence and the <unk>.

Fact is you can slice of the network those are.

A few people are writing about that now a few people understand that.

And you're starting to see a bit more visibility of that to why that makes sense.

And we've been a few years ahead of the curve.

But.

Oh ran was pie and the sky of couple of years ago.

Well, we'll prove that it works and Las Vegas.

Yes, the cloud native architecture, maybe with Pi and the Sky a couple of years ago, we're going to prove that it works and and the rest of the world will fall and and you saw.

Seeing that Youre, seeing and Oran now being adopted around the world.

The.

And the regulators understand and know where they didn't have a great understanding of the couple of years ago. So the.

Everything I think from an architectural point of view and Mark really as the architect here I don't know that.

You spent a lot of time on and you've talked a lot of people I don't know you changed anything today.

No absolutely I mean, the more the more we play with it the move in price.

We are of course, we have on boarded of software.

Telco software on the cloud and <unk>.

It's fascinating how fast it is all we can make changes how we can and scaling I mean, just scaling it and the telco network everything is frozen and you plan. Your investment 18 years ahead, we scale, we scale up and down during the day during the night, we need the new platform to test and you.

The private.

And the use case, we just scaling and it's quite fascinating for engineers to see what we can do there and.

So I'll just repeat what I my opening comments last time, which is where we're technically now confident that we can do technically what we've talked about for the last several years.

But we do have execution risk and I'm sure the things won't flow.

So whether it be whether it be COVID-19 supply chain or the actual execution of taking things from the from the laboratory.

And then deploying them and Las Vegas, and and multiple cities over the next few months.

We're going to have some some stuff's not going to work and.

And having been through this kind of scale before and and we just have to fix it and then we find out how we find out where the whether that strategy of picking the vendors who are committed to what we're doing.

And that we pick the right team from our vendor community and do we have the right team internally.

To overcome the obstacles that we inevitably we will face and.

And we're all confident today and then essentially lineup of Las Vegas.

We're probably going to be less confident and the next day. That's the way my experience and then we'll dig in and fix the problems and.

And.

We will be patting ourselves on the back hopefully.

But the.

Its execution risk and so if you guys as investors.

That's the serious risks.

But we've eliminated what I always thought were by far the more serious risk.

Probably 10 times more risky as it was could you architect the network could you enter the marketplace. When there was the paradigm shifts so that your technology.

And one up not only the not only the encumbrance of the United States, but we're one up and what other people around the world are doing.

Particularly in China. So.

And.

Yes, it will say.

Thanks Charles.

Okay. Thank you very much and I will take the next question from Phil Cusick with JP Morgan.

Please go ahead.

Thanks.

Hi, guys. Thanks, So I wonder a couple of things first can you talk about the.

And the commitment of the Amazon AWS to building the edge of their data center network out to host your applications.

Close to your radio layer and those AWS hosted applications need to be.

And then separate topic I Wonder if you can expand on the T mobile relationship.

What's the ideal outcome from the CDMA network dispute can T. Mobile help you transition customers or is it really too late with only eight months before the plan to turn of CDMA for that and you really just need them to delay.

Yes, So let me take the one on and the architectures so.

Everything north of the base station and the site is in the cloud right and then when we have the different options for the edge. So for the sites, but also for the private edge.

The first option is to use.

Our boost so we different form factors. So what is the outpost H small rack daddies.

And on boarding all the cloud we've itself. So you can move that small cloud where you walk all the way to you of factory side of whatever so we have that option with AWS. So we can put a software all the way to the edge. The other option and is that we are building together the next generation.

Ron acceleration of D. What we call the Du, which of the compute part of the Orion.

We are building that next generation of dam, which is Cub scout and scout, which will allow us to mix.

And use that technology and <unk>.

And as well.

The first part of the deployment as you know is on flex round, we've entail, but we have also announced we are working with partners, we announced Qualcomm now AWS from generation two because speeds are going up we are.

Our intuitive and massive mimo, we are accelerating CBRE and a lot of other technologies and Thats, what we are doing with AWS.

What was the second part of the CDMA Mark do we need to have more do we need to have more out post construction.

And we need to have a lot more out post construction by Amazon and that of substantial capital commitment from them.

Yes, yes, we have we have plans we currently have.

Today, we have designed the network with the latency will require we choose.

And not being could you give a number but it's way better than what you see in the current networks. So we have enough.

The local zones, and <unk> and <unk> zones do create the differentiated latency network.

But as the demand increases for extremely fast machine to machine, we are going to build and we've.

AWS is going to build a deeper and deeper into the network.

And when the demand is coming up so we have we have plans with them on that.

The key there is fill of its designed into the architecture. So we have to we don't have the bolted on and so you know every time you every time, you bolt and something on you get heavier and heavier and heavier you don't have the right. The foundation. Eventually you just get so much cost of bolt stuff on and try to make it work and and so we can.

I believe that the edge is going through the phone and your hand so.

So its going farther than even the even even the most people think about it ultimately will be the phone and your hand, but are architected to go all the way from the phone in the hands of the core and everything in between.

Without having the bolt stuff on that.

And that helps.

<unk> Oh CDMA.

And that.

And that's disappointing.

I mean, that's very rare to get into the politics of the this kind of stuff, but the CDMA issues real you saw our disclosure.

I was extremely disappointed I've always had a high respect for the management of T mobile and <unk> and particularly <unk>.

Joe.

But I was disappointed when he went on television and and really said a couple of really untrue things. One was the Theres no big deal that he is turning the CDMA network off.

And.

Yes.

Yeah. So so.

So 10% of the people didn't have phones on the 900000 people no big deal first.

The first of all of that number was way low as you've seen and our disclosure and I'm not sure exactly and I don't think he is looking at our books, maybe Ed but I don't think he is looking at the books I don't know how you knew the number and the second thing you said, which was even with shocking was it you had to do it because the FCC was buzz.

Acquiring it and <unk>.

<unk> I mean, I don't know exact words, but that was the gist of it but this is the same company that that goes on Twitter and talks about Dom and dumber and how there for everybody the love everybody and there for the consumer they went to the public utility Commission and California under oath and said the B three years before they turn CDMA off.

And I forgot about that once they got their merger Don.

They became they look like every other big company you of shareholder should be pretty happy.

Because there are certainly given a good return.

There they've gone from synergy of 43 billion to now talking about $70 billion of synergy from the and Theyre going to go and turn off.

Millions of customers, particularly low economic customers to me that.

That's the heart and.

And that's just not the T mo of that.

And I've seen before.

They've become the grinch right so the.

We've seen the story before right the grant.

When installed everybody's Paul.

All of the kids toys, right and there is steel and everybody has fallen out of their hands and it doesn't work anymore.

And it was kind of of the grants Hart was too small set of tiny Hart and so the <unk>.

The non carriers become the on carrying carrier and.

And Thats of Shang.

Now the positive is.

That the grant you Dan decided to give the toys back.

And as Hart grew three times the size.

Alright, so I am hopeful that T mobile will nobody will work harder than this company to try to to make that transition smoothed, but it will take the answered. The question you will take more time, if they were to if they were to give us several million phones today that we could use we still couldn't do it and the next day much because we don't always have the email customers.

Customers don't always thought of emails I don't the dresses they don't the more transient they don't always come into our stores.

So it's a much more difficult process of verizon's recognize that they've extended their <unk>.

<unk> shutdown, so you may shut down.

And I hope that that T mobile will reconsider that but if not it'll be a lot of material impact on our customers and certainly of our financials.

Surely that might be the hardest I've left on the conference call and 20 years thinking about Mike is as the grants on top of milk profit. Thank you well I'll, let Ed Hardy is so small.

And it's funny because I just haven't read the story to my granddaughter and every time I kept saying the grant of check carefully.

The Green Green I kept Sam and Magenta, I kept saying, the magenta and branch and.

And then just serendipitous I guess, you've learned a lot from reading of your kids grandkids.

Thanks, Paul.

Okay.

Oh.

Thank you for the question. The next question and we will take is from Michael Rollins with Citi.

Please go ahead.

Thanks, and good morning.

First just following on your supply chain comment is there a mechanism for you to ask the FCC and Doj poor and extension of your build out requirements and do you plan to submit a request for that.

And then just secondly, taking the step back on the retail wireless strategy can you share with us.

And how the postpaid and prepaid retail strategy is going to evolve over the next 12 months and I noticed in the <unk>.

10-Q that you described after acquiring king that you're offering that nationally and I was just wondering if that got it satisfies that component of your regulatory obligation to be a postpaid.

Service provider.

Yeah, I'll, let John talk about the the <unk> acquisition and our postpaid plans.

As far as supply chain.

Obviously, the the FCC the agreement we have recognized as the their supply chain issues outside of our control of that the timelines could be adjusted but we don't look at it that way internally I mean the.

<unk>.

And you always have.

There's always unforeseen circumstances, this one might be particularly acute.

But we're not going to let anything stops and we're focused on meeting our timelines and.

And the.

Regardless of what the challenges are and and nobody's going to know, but that's our focus and we will have to reevaluate that.

From time to time, but but we're focused right now on.

Las Vegas, and and we're focused on the 20% build out.

The June of next year.

John.

Yes. This is John thanks for the question.

Certainly you've seen us acquire now of <unk>.

The past three quarters.

And certainly started with boost and we are working to improve the profitability of that business. We did acquire Ting and if since we launched it as the nationwide postpaid service.

We're starting to see some traction there and we certainly do expect to close on Republic wireless here this quarter.

And I mean generally we're looking to expand our reach expand our distribution.

And look for new segments to serve.

Compared to where we started with boost and.

And look I think will really start hitting the gas when we have access to our own network and the best products and services.

And <unk>.

Just to follow up on something as Charlie said earlier, the handset market is a big factor for us right now.

We're certainly making some progress but.

We could potentially do more as the supply chain situation starts to open up a bit.

Yeah, and I would say.

And does that.

Not to belabor, the CDMA and point of view, but it talks about the tiny Hart.

<unk> got at LG is shutdown production, which was which is what sort of our biggest vendor for films for our customers and you.

You got a pandemic and you've got a supply shortage of chips right and that.

And as the time that you've decided that you gotta make $70 billion of synergy and maybe instead of maybe $69 eight and I doubt you guys would sell the stock if the only made $69 $8 billion of synergy right. So that's particularly disappointing.

And does the King National launch does that qualify for the regulatory requirements.

The year anniversary and.

And I believe after.

You closed the transaction the boost is that right.

And the answer is yes, it would dwarf satisfies the final judgment is but we believe as we add Republic and and other growth into the market and will further reinforce the debt.

Thank you of being a little too.

And along the day, we got the FCC obligations, but.

And what we're really doing is built on the world class network.

The takes the telecom to the next.

To the next level really it really is and it network that it looks like the telecom network. That's really it's really it's really the same thing that happened and it.

The World 20 years ago, So we work with the FCC.

To explain what we're doing and why we're doing.

Why this is important and the FTC is always going to make decisions and the public interest and from time to time, they may want us to go and stronger and one direction or another and.

And we're always listening to their advice of how we can help consumers because.

We are of regulated body and the company in that sense and so we don't I get it.

The retail, but we got so many yeah, we're going to be in and retail postpaid and a much much bigger way.

But for us to make an impact the bigger.

And we have to MRO network, we have to have the cost of the owner economics and we have to have the unique network that we can do things differently than other gas can do and that's where we can make the VIX and impact.

No.

That's where you'll see it.

Thank you.

And the next question is from Doug Mitchelson with credit Suisse.

And thank you so much I love the.

Thanks, so much of a lot of the blockbuster and al.

What you said actually of 101 point Charlie but.

Yes, it did.

Yeah Jonathan.

And to the Guy and call centers or all of ours automate.

And why.

One thing about management, and then you make a mistake and try not to make that mistake again and.

I think youll ever see us go into the last year's technology ever again.

So.

A few quick ones from Mark I think you answered this in the quarters.

And the Bill's question, but I still wanted to ask it directly regarding massive mimo and <unk> because there were some controversy over the last sort of couple of months with the radio math.

And through beam, forming and other things that aren't fully comprehend moving to from the.

The radio to the distributed unit with the open ran what you were saying basically is highly confident that Oh ran on your architected and that work will have sort of that wishes to of massive mimo and that's one second Charlie when you look at the available financing and engage the potential pricing for the upcoming $3 four of five spectrum auction.

And what's your level of interest and expanding beyond the 140 megahertz or the or so of that.

Yes, I'll give you the confidence of showing out and the technology at this point of view think about future potential market shares versus the spectrum of the other folks have Paul C band and then lastly on one of Jason's on but.

And your thoughts on the the managing of the June 'twenty ones that are coming due whether those are the sort of rolled border or paid off with cash and thanks. So much.

Paul can answer of the June question.

Yes, we're going to be opportunistic and the marketplace that we clearly have enough cash on hand to.

Redeem both of it the shares at maturity as well as next years so.

And then what was the other part of question after the Mark for Yes, you said it right.

On the massive mimo and I just want to say a couple of things about Orion.

We we have seen the extraordinary investment, especially in the U S ecosystem of silicon.

We are in the range of domain everybody has been dreaming of that for the last 20 years of silicon as being the weakest point and what we see now Wow I mean, it's all of the place.

Orion has driven that I mean, you can think of it of all the <unk> and silica and industry all of the U S and abroad investing there to serve that market I mean, I've never seen that so what we have and our ends for two day, but also from massive Mimo is just is just incredible and we're going to leverage that and and I'm, making a bet.

That the existing vendors are going to use the same silicon that was brought to the market by the Aurora and because they just don't have the same in house.

So that's forcing them to come to the market as well.

And for massive Mimo now there is the debate about massive mimo and people are confused about Orion one of the debate is that you need to pair the.

The compute with the radio in order to manage the beam, forming and we agree with that but all and allows you to do that as well right Ryan and allows you to bear the compute and the software and the radio in order to have advanced beam forming.

Or and can do exactly the same if not better.

And then on spec of 100 megahertz, probably was table Stakes.

Up until the T mobile sprint merger and and last auction.

Obviously.

We look at we've been and every auction, except the first two and once that adoption of that nobody else has been and besides got the company. So.

We always look at that but but.

Yeah.

We have advantages and our architecture, we have enough spectrum to the.

Do what would the.

To grow and.

We'll go from there and we'll see what happens because of our spectrum caps and spectrum limits and.

We think that the.

That the regulators would look and make sure somebody doesn't capture too much at all of it.

Maybe getting a little bit sideways, but we'll see.

Alright, Thank you very much.

Thank you and the next question.

Jonathan Chaplin New Street.

Thanks, guys.

Thank you got a couple of couple of quick ones.

John You mentioned that the AWS deal materially helps you on Capex the guidance of $10 billion.

Does that mean.

That the this one of the scope of the network now that you've locked in this the Amazon deal is bigger than you initially anticipated.

And then you mentioned that ryzen is keeping the CDMA network around for a while is there any way to transition.

And may subs off of the sprint network onto the price network I presume that there would be happy to have the extra traffic if they've got a let's take the cost there and then thirdly you bailed on on the C band auction pretty early and the process what does that say about your sort of the appetite for the three gigahertz band generally.

Would you.

Likely to be a big player in the three five gigahertz auction. Thanks.

And.

And the origin question look we.

I feel confident that we have a fairly good feel of what the value of spectrum wise and we just thought and that particular auction.

Cause of the structure of the auction and the dynamics of the auction and that it went.

And it went far beyond what a reasonable.

Company would bid and and I think.

Yes.

That was the place that that that that was the level, but that didn't make sense of our company.

Obviously, we had hundreds of millions of customers and you had bet you are.

You were telling everybody that took the millimeter wave was good was the future and.

Maybe that technically it was a bit of a problem.

You had a different strategy and and I think the I think the guys regardless of the price I think they'll do fine.

I think the long term, they're going to do just fine and there can be very happy that they have the spectrum. So.

But it's it doesn't set up very well with the consumer.

The $90 billion has to be paid by the COVID-19.

And unless the unless the government is kind of give the money back so.

Hum.

It makes it a less competitive industry out there so.

I think it is.

Maybe even more important for the distribution successful and then I think of the AWS moving and cloud in general we started.

And Mark you've been looking at for a long time, you may or may not know, but mark used to be one of the big <unk>.

And providers, he's always been frustrated by the pace and the the technology and that's one reason he came to the work versus dish Chrissy could start the clean sheet of paper and it was his dream to do that was and has had had to do that.

And he knew a lot better than we did the.

The issues with the legacy and so I think that at least in the meetings that I've been in and stuff.

We always had high hopes for cloud.

We knew it would get there, but I do think the scale of that after the investment and the.

Vision of Amazon is maybe a bit larger than.

I mean, you might have to speak to it maybe because you had been working with them before so yes.

We were to start of network by herself, we would build the <unk>.

One data center of second data center for redundancy here.

Just expanding across the footprint.

And.

In terms of what we can do.

The implement and different regions and different.

It will be the zone Dc's. This is something we could never build nobody could have bureau from day, one it would have taken 10 years to do and.

And the same of the transport and the redundancy on the of the size of the the compute the same on the on the elasticity of the network.

One of the things about the telco and that is really slowing down the telco in India over optimized.

They never have more capacity than the and they need.

We have and limited capacity.

And for US it's a luxury because then we can put additional software and we can do automation and we can put things of that new telco would dream of because the.

All of the hardware is tight there ronny that 78%.

Daily down up during the day during the night. So it is a different scale yes.

It cannot be compared.

Yes.

So and the question around Verizon and the CDMA, it's really not a viable option because you got to look at the bands and the devices, where our customer base of today and the fact that it would be potentially even more disruptive to try and do the transition and.

So we're very focused on the customer experience, even as we go through those transitions with T. Mobile today and that will just add one more variable and actually one more complexity and that staff and so while in theory of it might be and interesting concept and it's just not practically or operationally viable not dimension of its not plausible from a timing standpoint.

Per year.

And try it again.

Okay.

Got it thanks, Thanks, guys.

Yes.

Okay. Thank you so much of it will take the next question.

The next question is from the going to be from.

The non branches.

Excuse me.

Hi.

And then kits.

This war with.

Please I apologize for that.

And contrary I would sort of mic sales, sometimes it's all good.

Uh huh.

So clearly a couple of questions.

First on the DBS side, you know the.

Directv deal with the private equity I mean, it probably opens up.

Another avenue for yields and Luke.

Towards monetizing the asset.

And you've been running this business of cash margins have expanded like you saw with the results to date.

Could you just talk about it.

The the the.

The AT&T plan makes it a bit easier for you to somehow look at divesting the steel regulatory issue of the site.

And then on the capital side.

The AWS deal.

Should help you on Capex and like you said I guess the it increases your opex needs, but when you think about the overall the capital needs I guess, it's also a function of the cash burn as you scale the business and the first few years.

So the $10 billion, probably does not capture that could you give us a sense of whats your toolkit of capital needs would be if you include the cost of scaling the business and the initial years of cash burn.

Yeah.

Yes.

Yes, we're not sharing that modeling today, but I'd say a couple of things one is.

The $10 billion from builder and that doesn't all happen in the next two years, we don't spend the entire $10 billion to meet our FCC obligations. So.

And Youll see it as we ramp up you'll see the ramp rate, we get two and you'll be able to.

The model that out we just gave me and the overall objective of where we're going but it doesn't all of the 10 billion isn't isn't spent by June of 2023.

The which is a major milestone so.

But it does.

Us through the.

And the complete build out so.

For the FCC, So and then the other part of the question and I don't I didn't write it down was direct TV of Directv.

I'd just say the same thing and I said I think it's inevitable those two companies go together of theirs.

It's harder and harder from it would be harder and harder for regulators and and people to it.

To make the case win.

Gosh, there's got to be 10, or 15 20 competitors now.

Our kind of.

<unk> $100 million 100 million subscribers.

I think dish and Directv or price.

And even the top 10 video companies today, and and you run the risk that debt.

Pretty materially Rural America, and other people don't have a choice, but our vendors are competing with us and.

No the linear TV, so that's an unhealthy place and.

So I think that's I think that's inevitable, but certainly certainly.

That will be something that gets scrutinized if it ever came to pass that's and AT&T question you'd have to ask of them, whether they have an interest and that and now of TPG question.

And can I ask just one quick follow up on the AWS issue was looked at a lot of discussion of that Alan and Amazon putting capital into dish as a part of this whole negotiation.

And.

We've talked about that for five years and I just.

Uh huh.

I said this last time I made the mistake.

Doing at zero percent converted.

Which is essentially of selling shares of little bit less of 41 months of share.

I thought we'd get better execution on that.

They they want to do they're so committed to the cloud telco cloud and they want to be a vendor for everybody associated asked of them, but they don't.

Theyre not pick and sides of here I think they want of your vendor for everybody and the world and and.

And theyre going to they've got a leg up to to learn from us and and.

And so forth and where we think we're building the world's best network and.

And.

We think that's pretty valuable and and we think that that's a lot more valuable than where the.

The market has us today, so we've been building value for the last.

Five years every day is just not showing up.

And the analysts that are on the call you guys I used to be financially as you want numbers you want to put it in the model. It spits out of net present value kind of thing and you can kind of value of company.

We're not quite there yet that we don't quite fit that mold were a bit conceptual of.

We're one of four wireless players.

Can't Nobody gave you and connected.

Without one of the four of us and the Minerva.

And of nationwide way.

And the wireless business is going to be a bigger and more profitable business for everybody and turn this business, putting the three incumbents.

Because everybody has to be connected Facebook made 10, almost $10 billion this quarter and.

I think 90% of it was from your phone and data.

Data on your phone.

And I don't know im not that smart and from Tennessee, I can't figure it out I just know that that is.

One unfortunate profit parent company can make money without being wirelessly connected.

Not one of the big infrastructure companies, they all rely on it.

As the necessity and the technology is changing to.

And to provide more robust service for all of the incumbents and us.

And opens up a lot of value added service for the incumbents and for US and we think we will get our fair share of that.

And when you start seeing that you'll be you'll be able to put that into a model and.

And but we're.

We're probably that first FCC milestone before.

Everybody would be comfortable with the numbers to put in that model.

I think we're still bit consensual for another year.

Thank you.

Yeah.

Okay.

Operator.

So maybe of time from one more question if somebody's got one.

And yes, Sir the next question will be from rich Greenfield with the light said.

Okay.

Thanks for taking the question two.

Two questions Charlie one from Walt who couldn't make it today, but it in five or 10 years. His question was what will be generating more EBITDA for dish traditional consumer wireless our new <unk> applications, and what role with Amazon play and actually selling the ladder and then I've got a follow up on the media side.

Rich Hey, I saw you guys have been great great quarter for you guys.

[laughter] the.

I think I think <unk> applications will be the more valuable partner part of our business.

But all.

And because that's where mark.

Likes the tanker and.

And he kind of runs of the show when it comes of that kind of stuff.

And the.

And Amazon.

If you look at just the question you'd have to ask of them, but but if I look at it from a big picture point of view they.

They are of business.

Does cloud, but it doesn't do the last mile. It doesn't wirelessly connected but they have a huge base of customers that need to be able to connect the campus or connect the factory or our connect the last mile or connect to their customer and a secure way and you've seen some of our white papers on the security about how we're what we're doing some more secure and we believe than incumbents.

And they have a retail business and that retail business you need to be connected to the order, but that retail business also needs to deliver things too and they deliver by plane and by truck those move they need to be connected they are going to deliver by drones needs to be connected they of.

The devices and your home they have.

And they want to they want to.

Connect your home, whether it be of camera or doorbell or Alexa.

All of those things need to be connected they'd like to make those products better and safer and.

If you have if you are connected and you can do that on your own private network. They can make their products better and maybe get a leg up on and on their competitors.

So all of their businesses and then and then and then their video of company. So the.

Lastly, I'll, let the video you needed the connection to get it and.

And whether that means store and it overnight or on the phone or what are the T.

T V or watch it on a tablet or watching on the likes of device. So all of those things and they're making a move into healthcare and.

And if you had the future of health care as people being connected so that we can be monitored and without having to go to the emergency room save cost and and.

And give them better outcomes to patients so.

I don't know I cant.

I'm fortunate enough that I'm, not smart enough to figure out all of the stuff that you guys figure out im not smart enough to figure out every day.

And to write a report nuts.

I'm, not smart enough and I can't even speak English and.

And all I know is I can see trends and I can see where things are going I can see.

And what people do I observe what people do it and you.

Just observe it and <unk>.

And just say, let's go where the let's go where things are going and lets invent things that people don't even know they need and let's make it a great product and so alright.

The rich you had a median follow up and then operator, we will go to the press after that rich speaking of kind of speaking of where the puck is going all of the media companies now they just redid their NFL deals, they're all talking about the fact that they are now going to simulcast all of the NFL games essentially on streaming services that don't require dish or.

Comcast or Directv or any of you.

They are really putting now even some of their most iconic content out of the bundle.

Yet.

Sub fees keep our affiliate fees keep going up and Retrans keeps going up and I guess.

And what changes this.

Is there going to be someone going to draw a line and the sand Charlie and just say this doesn't make sense of affiliate fees should be down 30% not up five.

Okay.

Affiliate fees, you're probably down over 50%.

But what makes that happen who's going to make that happen.

I don't know I don't know I mean, I think that debt.

I think it's unfortunate.

Very empathetic for broadcasters, particularly local broadcast Theres a lot of them are.

It started out of small businesses and growing their businesses there they.

We're not only having to deal with with.

Legacy linear TV.

Today, they are they're having to compete against their there are big owners and I think they've got to come up with strategic solutions to reinvent themselves.

We'd like to work with them to do that but.

But retain the retrans as Pete.

We were the first guys as they had a regional sports with the regional sports of baked in there.

There are three years later people figured that out.

Retrans as Pete.

Net.

I mean.

<unk> always said and I've said that the Retrans is basically and NFL season ticket subscription.

Right I mean, how have the Academy awards due this year.

It used to be must see TV, it's just changed.

Alright, operator, and retrain and Fresno.

Oh.

What did you say ritch.

I was just saying retrans, peaking as it is an important statement.

I think captain obvious, but we'll see.

Thanks, Charlie.

Thanks, Tom.

Alright, operator, we'll go to the press now.

Okay. We will now take questions from members of the media.

And again, if you are a member of the media and would like to ask a question. Please press star one now to enter the queue to ask your question.

Okay.

And our first media question comes from Scott Moritz with Bloomberg.

Please go ahead.

Great. Thanks.

Charlie If you would go back with me to the trial when the.

State Attorney generals wanted to block the T mobile sprint deal.

Youll recall that the witness.

And you had to describe the SKU.

New business to the judge.

Was this the Amazon cloud partnership part of that discussion.

Amazon, specifically was not and I wouldn't get the testing because obviously the technology and the paradigm shift and what were you doing was was and to the judges credit.

Which you know.

I think the strike people on this call that Ken and I understand what Mark and I was saying, but I think he understood that the world was kind of go to the different place.

Yeah.

As you know Scott it was the closed proceeding.

Got it thanks.

Thank you and our next question will be from and you Fitzgerald with W. S. J.

Please go ahead.

Yes, Hi, Charlie two questions if I could first of all.

This partnership with AWS will affect the Capex.

Could you describe is it necessary is it dependent on AWS and building more infrastructure closer to the edge closer even to the tower.

And do you have any idea on if thats the commitment.

And like what kind of time frame.

<unk> would be working on.

And then just second I haven't seen the filing sorry, if I missed it what is the company.

Head count today, and where do you see hiring going over the next.

Yes.

Yeah.

Okay.

Mark answered the first part of that question, but maybe you can summarize.

And yes. So we have we have designed and network with AWS and.

The data centers the I have today.

And what the call the availability zone and local zone together, we have to transport. The average is sufficient for the first phase of our.

Our services and the latency that we have defined we Steven and that latency. He's he's already of much better than what can be done today with the <unk> plus the five minus networks that we see in the U S. Net.

Net win over time.

We expect the demand to be for very specific applications and some customers to ask us for specific latency Nutcase weekend.

Push up which pushed down the boost or other sites with Amazon and <unk> and we've discussed that so we have a path forward for that when needed.

And in terms of head count and I don't think I don't know the we've disclosed that but we certainly have thousands of people working on them.

The biggest the biggest hiring and probably has been the deployment.

Over the last.

Six to nine months private and the deployment and then the other thing that they just don't have visibility to is our vendors.

I mean.

We've got over 10000 people.

Probably between all of our vendors working on.

You know what we're doing so.

There's a there's a tight community that wants to see this happen and but we're we're we're happy to be working with the people and some big companies small companies and.

And that's fine because we all want to see it happen and we all want to make it happen and everybody. We're all convinced we can we can do it.

And we will see how good we are and when we start working through the problems.

Operator, I understand Theres, one more press and queue. So we'll go to that and then close up.

Alright. Thank you we'll take the next question from Michael D&O.

Reading.

Yes, hi, Thank you so much for taking my question I appreciate it two quick questions.

One is the can you talk about your plans for the CBR spectrum licenses that you have my understanding is that the radios the the radios.

May not support that spectrum band and so I'm wondering if it's going to be deployed at a later date or kind of what the plan is there and then.

The second totally separate question is yes.

You've talked about having silicon from from Qualcomm, and Intel and and now I guess with the Amazon Graviton and silicon.

Or are you planning to deploy.

The equipment using that so all of those different kinds of silicon or are you going to pick one and stick with that or like how does that work.

Yes.

And I'll touch on the CVR is to start with and then and mark but and in terms of CBRE.

Are the radios that we're currently deploying tour and macro build and for for example for Las Vegas and the other market that we have underway those radios and don't include C virus.

And we are working on another.

And another generation of radios.

The will incorporate CBRE as we go forward and and what's important there is a lot of the traditional radio is the day for CBRE sort of really being LTE and <unk> radios or band 48 and.

We're actually moving towards and 48, and so being sort of <unk> native.

Need to see that next generation of radio development of happen the other thing the.

<unk> probably seen it.

Is that we have filed to look at different power levels.

And increasing the category and the power level up on the <unk> as well that would give us far more flexibility and a much more efficient build.

Using that spectrum and so we're working through that and that will have an impact in terms of the supply chain. So with that I'll just hand, it over to Mark.

Yes, so the silicon. So today, we are deploying of 44 our network.

100 megahertz. So we are happy we have flex run architecture, it's far from enough. We're using ice Lake. We can include the order processing. We are good the acceleration guards net.

When we go to massive mimo when we go to the CVR is when we go to other bands.

We expect to need.

More of isolation and more integrated silicon and that's our second generation. That's when we will make the choice for additional and Silicon you were asking about Qualcomm and graviton and on top of flakes. Brian you have to think about the diversity, we're going to use for small sales for example of indoor.

Distributor and indoor I am pretty sure that the type of silicon and we're going to use will be different force sit in a very <unk> mimo and I'm pretty sure.

And that we will have integrated do you and all of you we've different type of masculine the of.

Of accelerators so.

We will then do we have one silicon per use case, alright, but when we diversified the use cases I see different.

And our requirements and we're working very hard with the software vendors to put an abstraction layer on top of the silica and so that we can pretty much the port our software on top.

The much changes between the different blocks of silicones.

Great. Thank you.

Alright. Thank you operator that will complete the call. Thank you.

Alright, and this does conclude.

Got it.

Good day.

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