Q4 2021 DISH Network Corp Earnings Call

Okay.

Good day and welcome to the Dish Network Corporation, Q4, and year end 2021 earnings conference call.

Today's conference is being recorded at this time I would like to turn the conference over to Mr. Tim Messner. Please go ahead Sir.

Thanks, John and good morning, everyone. Thanks for joining US we are joined on the call today by Charlie Oregon, Our Chairman Erik Carlson, our CEO , Brian Newman, EVP and group President of dish TV, Paul Orban, our CFO and on the wireless side, we've got Tom Cullen EVP of corporate development, Steve and by our Chief Commercial Officer de Maio, our EVP of network developed.

Jon Springer, President CLO wireless and Mark <unk>, Our Chief Network Officer before we start I need to remind you of our safe harbors. During this call. We may make forward looking statements, which are subject to risks uncertainties and other factors that could cause our actual results to differ materially from historical results or from our forecast we assume no responsibility.

City for updating forward looking statements for more information please refer to our SEC filings and with that I'd like to turn it over to our CEO Erik Carlson for opening remarks, Eric.

Well, thank you, Tim and welcome everyone and thanks for being here today I'm going to start off with a few brief comments and then turn it over to Charlie for a few additional remarks.

Well Charlie is done we'll open it up to your questions.

During the call today, we are we have a few slides that are available that we will refer to on our investor site at IR Dod dish Dot com.

Before I dive in I want to start with saying that our thoughts are with the people of Ukraine and our team members.

Small development shop, there and so this really hits close to home.

And we wish them, obviously safety and good health.

Getting into the details on the whole, we executed with financial discipline and reported strong revenue and free cash flow numbers for the year look we need to do a better job of their subscriber targets for dish sling and retail wireless.

And we've removed some headwinds in order to execute this year. In addition, we have accelerated or a wireless network build and are excited to share more about this in a few minutes.

With regard to the fourth quarter dish lost roughly 200000 subscribers and this is driven by several factors the most significant being our local programming dispute with <unk>.

For the majority of the football season.

Now I'm pleased to report that we were able to come to terms and signed a new agreement with them earlier this month.

And in addition, we had a price increase in November it did have a impact on our subscriber numbers.

We will make a positive impact on the bottom line this year.

We kept this TV very profitable with a disciplined and smart marketing expenditures, we managed to focus on acquiring and retaining long term profitable customers.

We played a where we're strongest in rural America with higher credit quality customers.

Turning to sling TV in the quarter, we lost approximately 70000 subscribers. So if we bought we didn't execute operationally in the fourth quarter to a level that we expect of ourselves.

But as we've talked about before we needed to reengineer the platform as well as the user interface. We focused on that work last year and completed the majority of the effort in Q4 overall the feedback has been tremendous from our customers and validated by the third parties.

Sling is a profitable business that will grow it's going to require a little patience, but with the platform overhaul last year, we're now positioned to be able to innovate and enhance the customer experience with new features and.

Differentiated offerings.

Sling is still the best overall value with regard to other OTT services due to the service reliability live TV offerings watch party capabilities and its value price position. So it's imperative that we execute on our plans on time and as intended.

On pay TV, we remain focused on acquiring and retaining profitable customers and delivering a great experience for both dish and sling.

Switching gears a bit our wireless business is poised to take off in 2022.

Our retail wireless business is set to chart, a new course, and well we lost approximately 245000 subs in the quarter. Our disciplined operational approach continues to pay off as we have driven profitability into that business. We are building operational foundation upon which to grow our retail wireless business.

We had headwinds that impacted us.

The supply chain disruptions, specifically significant cell phone shortages and the burden of the CDMA shutdown.

We've worked with our vendors to mitigate many of these issues and we'll continue to make progress that will build upon in 2022.

Our wireless network team has made significant progress over the past quarter. In recent weeks, we will begin opening up access to customers in numerous markets over the coming months and at a high level well hit our June milestone with 20% of the population covered.

We currently have over 25 major metro markets ready to be deployed before the deadline, including around 100 smaller cities across the country.

And look we're excited about the coming months and the deployment plan for the rest of 2022, and we have the necessary capital to execute our plans this year.

Las Vegas is already up and running we've had friends and families using the network, we're about to expand it to additional customers in the coming weeks through project Genesis. In addition, we're pleased with our results from the 110 spectrum auction, where we acquired bands that align well with our current C band and <unk> Holdings.

I want to tell you more about that in just a minute.

Well bring it all together in 2022, it's shaping up to be just a remarkable year for dish. We've got a lot to share as we evolve our business operations and our products and services and a deep inroads in the wireless space is going to be a year of execution and are excited about our opportunities. Our best days are truly ahead of us now I'd like to turn it over to Charlie for some opening remarks.

<unk>.

Yeah. Thank you Eric just a just a couple of things that they may be frame. Some of the questions that we may have time to get to today.

Three two big developments really.

Since last quarter's call and one potentially a very positive development.

First the auction.

Resolved.

One analyst kind of figured it out.

To some degree but strategically.

We were able to to when spectrum and <unk> and then ultimately win and high power C C band.

Frequencies that are together that actually are.

Our adjacent to each other and that's important because of where we think.

Not only are.

Consumer network is going but also where we think the private network enterprise business is going so that was kind of a double bank shot we had to have we had assignment rounds in both of those options. So we didn't know that we can be we werent sure that we could be adjacent to each other but it was critical that we were that we could do that and we were able to do that so.

That was a big positive for the second positive is that our network in Vegas, you know, we actually have we actually have operational now of five G. Standalone network that operate operates in O ran with Oran principles, it's cloud native.

In the AWS cloud.

What Bonner boy.

Voice so that is the most advanced network in the world. There, we probably ended up doing a L. A.

A lot more development than we thought and some of the technology and with our vendors.

But that is up and operate up and operational on when it when it.

And when it works it works pretty well doesn't always we still have work to do we're not ready to spike the football we have work to do to develop it through all the cities and to optimize the network.

But the technical challenge them as.

As Ben has been resolved for some of the core things that we needed to do.

And the final potential positive is that we have reached.

And agreement with T mobile to really.

That resolves all of the disputes that we have together today that have taken up an inordinate amount of their time and our time, we have an agreement that's in front of the FCC and the Doj so won't be able to go into any great detail about that because they have to prove that but the one thing that we can talk about that we've agreed is that we will.

Support the March 31st CDMA shut off.

That we're working together both on communications on handset suppliers on incentives.

To get that done there's some sure there's some short term pain for us, but we've already experienced a lot of pain with that with the uncertainty and the changing date and long term our relationship we will be able to do to be to be much broader and positive for both companies, having said that AT&T will still remain our primary.

<unk> and <unk>.

The one that we work with.

On a day to day basis so.

With that Ah, maybe we can open it up to questions.

Thank you, Sir ladies and gentlemen, if you would like to ask the question, please email or by pressing star followed by one.

One if you wish to queue for a question, we'll take our first question from Doug Mitchelson with Credit Suisse. Please go ahead. Your line is open.

Oh, thanks, so much I guess really just two questions. Charlie you already started down this path, but when do you cycle back to last summer. While I think you were optimistic you could have a you know a market launch in in Las Vegas in December I know you've gone through the technical challenges, but I'm just curious sort of what have you learned over the last you know six seven months.

What needs to be accomplished that it was a little bit harder than you thought and and what's going better than you thought and give separately you you've talked about the $10 billion number for a few years now and sort of pleasantly surprised by the two and a half billion Capex number for this year and the 1 billion last year that means you are sort of three 5 billion billionaire and plus a little bit of Opex and so previous year development costs, but you know your your.

Trying to be pretty far below the 10 billion. So I'm, just curious sort of what's getting built.

This 20% in all these markets relative to ultimately you're you're 70% target is this just a thin.

Les are of cell sites to start or when you built out Vegas did you build that Vegas as you would get to 70% in and there's just some other spending that has to come down the line anything on that would be helpful. Thank you.

Yeah, Doug Thanks first of all we're six months behind in.

Where we thought we'd made its my fault.

We just didn't maybe anticipate that we would have to do as much on the technical side.

The voice the Viner voice that other people around the World China, China already has it.

Other people have.

<unk> are working on it they're happy they've had issues to we hope to ride a little bit more on their back end and we're actually part of the development there and a place maybe we didn't think we were gonna have to be.

Second thing is within.

Within the company just the management can be Jon Springer you saw is now the president and C O and really a lot of what we're doing we're building more of an IP network.

Look our wireless network looks more like an Iot network than a traditional wireless network with with with cloud principles and Oran principles. So Jon as it has been or has worked its way over the last 14 years and our organization up there and then our CIO at one time and our C O O for the company and and.

And is the right Guy day to data to drive that process and so we've you know we've made improvements in terms of how we're structured.

We'd probably carrying you know I think that ultimately we found that we had to become a system integrator. It wasn't a role that we thought were going to take on but with all the vendors.

Somebody has got to be the middleman between there and the glue that holds them together and we're much more involved in that and then maybe we thought we're gonna be so a.

A lot of lessons learned there but were certainly move.

Moving at a very fast pace now and we probably we probably squandered some time, but that's my fault the the capex.

There's a lot of reasons why that $10 billion numbers is a real number.

First of all our network build is very simple compared to our competitors because it's a greenfield we're able to go in and and we were able to RFP. For example, the tower leases. So we got real competition on tower leases.

Because obviously the numbers were going to be great for us.

Second it's one set of antennas, it's one low band radio when high band Radio and then most of our cost is in the cloud is not at the base of the tower. So.

Where we really just have a server in an.

And you know some batteries so.

That gives you a feel for <unk> by the way that at the end of this year $3 $5 billion of Capex, well, obviously, we'd be way more than 20% of the population. So it gives you a feel for how we're able to do that.

We were able because we are in the cloud, we can automate and do things that provision and other things that people can't do so where labor cost us less and there's just a lot of reasons are reasons. Why why are we can do that that second thing is it's probably not as not quite well known in the auction.

By acquiring <unk>.

We spent capex for that investment.

And the C band and <unk>, where we are able to use <unk> for for fill in where we will have some gaps in coverage. So we know we know when we built Denver, we're gonna have some shadowing and some part of Denver that that to build a macro tower to try to be very expensive or expensive rooftop to try to to <unk>.

Got it.

Get the coverage there, obviously with a new set of frequencies.

We're able to do that.

Save us money.

And if any sort of way so part of our investment in C band and see various actually pays dividends for us in saving Buildout cost worse on the backend. So I hope that answered your question.

Yes. Thank you I, just just to be clear Charlie I can sort of it's it's strange asking the question this way, but it was actually the other way it's like the 10 billion is looking law.

I only have two 2 billion of Capex. This year and 1 billion last year. So I'm just kidding I'm wondering when the bulk of that 10 billion hits.

Yeah. It goes out through 2025, right, where we will have 75% of every every county in the United States or every Pete I forget the exact SC.

Maybe CDMA I don't remember exactly what it is in terms of the geographic region. So yeah. We're on a we're on a cadence for Dave.

Dave can speak to this a bit more but we're on a cadence of so many towers per month and that's just going to go on for the next three years.

And then you know it.

Relation is going to probably be a factor in there and then we got some unknowns that we don't know and then we got some of the small cells that we that that we don't know about so but I think theres a lot of skepticism around the $10 billion and I think that disclosure should give should give you. Some confidence and then as you said, but I think we're gonna spend the $10 billion at the end of the day will come pretty close to it.

This is David Mayo, it's not only the progress relative to the 20% that will hit this year's Capex, but will also be advanced spending on markets to hit the 70% next year, which is probably the probably the gap.

Alright, alright, thank you all.

We will now move to our next question from Rick Prentiss of Raymond James. Please go ahead. Your line is open.

Thanks.

Question on fixed wireless access.

Some of the other operators in the wireless world, we've seen that as an interesting opportunity. How do you guys view your fallow spectrum position being put to work as far as is that an interesting business case to see you all to go out there not just mobility, but our fixed wireless access product.

The answer is potentially in fact first of all it makes sense for them to do it for them to do it right one of the things that all of the wireless providers for some that we've that we've architected in is that the real key to economics. In this business is to use all your bandwidth to use your bandwidth. They use the capacity that you actually they actually have more.

Use a bigger percentage of that so well.

And you see both the right.

Verizon and T. Mobile you know do that they get an extra 50 bucks or using an.

Inordinate amount of their capacity to do it to get 50 Bucks, but it's 50 bucks that they get for capacity that otherwise would life life allo. So.

So it makes sense to us and so that's kind of 0.8 point B is the other way to do fixed wireless is actually to do not have a mobility portion of it and actually just do fixed wireless. So you can propagate let bother you can build a lot cheaper.

And that's also a place to use your frequency, but you don't have the mobility you don't have mobility you just have fixed when you use your frequency and that's another way that at least in some portions of the United States I think that might be a better way to go and then the third factor is as we see.

Probably a better use case and from an economic point of view, it's private networks, so using utilizing.

People are giving people the ability to run.

Run their business and their cloud or public cloud if they want to.

And actually use them of our frequencies in a private way and make sure that they have access to the data so that that way. They can they can build and they actually can build a cheaper product that can build on it.

For product they can they can they can they can monetize their data. So we think that's going to be a.

Another place and they and private networks may use the data 24 hours a day as opposed to consumers. So that is another way to get your capacity at usage up on our network in the math.

Can you start running the math on your economic models of networks that maybe are using 25% of their available capacity today and you start moving that to 26 or 27, maybe get to $33, 34% to 35%.

For all the wireless providers that has huge incremental revenue potential.

I think there's a couple of follow ups on that then so the fixed wireless where you maybe don't need mobility would that be more of the rural areas.

Well it remains to be seen I think I think that the rural areas is the more logical place to start and you see some people doing that with some of the government money and things like that yeah. I think it's it did we've looked at it technically both ways.

And it's.

It's not clear exactly to me, yet, which is the right way to go.

But we're.

We're pretty well positioned we have installation and service network around the country. We know you certainly improve your fixed wireless access to extent you can send something to the outside of the house, which is which is something that the guys today are not doing that.

But you need to be able to go in on a rooftop or.

Or have a ladder or have safety precautions are you know a dispatch system, which we have in place today. So.

You know I think I think it is a place to play and I think.

Think that Theres, an opportunity to share spectrum, there, where we're if you become successful then you're going to run. It then you're going to run out of you have limitations on how many how many fixed wireless customers you can get in.

You can see there could be economies of scale, there, where where are you going into a new market, where you're not competing in traditional handsets, but you are competing against cable.

For fixed wireless and I think I think that that's a place where our industry.

Might see some sharing agreements in the future.

It says on the private network side do we expect to have some trials and maybe even you.

You said your announcements this year that with the network launching.

Yeah, Greg This is Stephen Stephen Bye.

Yes, we're already active in that space.

And you may have seen one announcement with Lockheed Martin and we're partnering on it.

With them with the campaigns.

Cam Hilton, but.

We have other projects that are currently underway and we expect more announcements coming in the future on this space.

It's an exciting space and we're seeing momentum pick up.

But it's not going to be material in 2022, we see that coming in as we pick up momentum into 2023.

Great.

Yeah, the private networks, it's an interesting interesting spot because some of our providers are very big in that space today, whether it be Amazon or Cisco or Dell or those are three of the bigger players.

Players in.

And potentially there and so.

Hopefully, we will be working with one or more of those those folks to make sure that we have the right product at the right time.

Makes sense. Thanks.

We will now move to our next question from Philip Cusick of J P. Morgan. Please go ahead. Your line is open.

Hi, Thank you.

It's great that Vegas is working Charlie can you give us some insight into what else has to happen before you can do a commercial launch and what that might look like.

Yes.

Well first of all we've got we've got to we've got to optimize the network. So it's like once you build the network then you got to optimize it so that we're in the process of doing that today and so.

It's one thing to say, we have some regulatory <unk>.

Issues, such as E 911, which we have to be able to overcome which we have not yet.

We can launch commercial service, but we're certainly well down that path, but we do use third party for that so we don't quite control that as much as we'd like to do.

And then we got to work with the handset manufacturers to make sure that that.

That bahner works in our in our frequencies are in the handset. So those are all those three things and then we have to have a marketing plan right in terms of how we approach the market.

None of these things are.

Our.

In and by themselves difficult, but you have to do them all and you have to do them all kind of come together at the same time.

Maybe to that point post the <unk> debt raise in the spectrum auction where are you on funding for wireless you've outlined the cost of the network, but should we look for a big subscriber.

Positioning cost component as well.

Yeah.

Yeah, well I think there is that obviously were.

We would we would think that that from a from a retail wires perspective, you certainly could have you certainly have sac right, but it's not a it's not it's not nothing like it is in the satellite TV business and so and we have ways to dial that up and down and obviously, there's many ways to attack that that side of the market.

The.

From a funding point of view were funded do you know if it were funded through the next year.

At this point in time, I will say that obviously you know we certainly would.

Probably need to raise capital sometime next year right and we think Theres a number of ways that we can do that but we think thats a better to be better to come to market. When everything is working and then saying well we're going to do it it's better to say we did it.

Thanks Charles.

We will now move onto our next question from Walter Paycheck of late Chien. Please go ahead. Your line is open.

Hey, Charlie you've got rich Greenfield, because walt somewhere in room right now.

But the question Walt wanted to ask was whether the new T mobile deal substantially replicate the technical and pricing terms that you signed with AT&T and then I've got a follow up on on Retrans.

I would say that I guess I wouldn't answer it quite that way I would say, it's certainly it certainly improved economics. It certainly there's certainly settling disputes that have been out there.

Involving the government.

It is not.

And my experience is it's better to resolve things between companies rather than look at regulators to do it and I'm really pleased that the companies are working together.

Really well and there's adults in the room to make to make sure those things happen and that's it's improved economics from a business perspective for us that it's improved integration into how the networks work together.

And there's a good spirit cooperation between the between the teams so that it's going to be it's a win win for both companies and although it's it's it's.

It's a short term.

We will have we will have we'll have increased churn and as we turned the network off as they join the network off those people have to go somewhere and we just can't reach them all and so we have to be prepared for them to do.

Bear for some people, who don't reach out to us and go someplace else I mean, John you may want to talk about that.

Yes, Thanks, Charlie as John .

And we've been working through this really since we bought boost right. This is Ben.

Situation, where we've been on defense we've got.

The first half of this year in front of us to get through and then we can shift to offense. So.

Strong cooperation with us and T mobile to move the remaining subscribers.

And it'll be a busy quarter, but as Charlie pointed out.

We're able to sort of close this chapter and move forward and get to growth.

The strategic thing is dish has its own owner economics, as we build out our network city by city.

We have the ability to use both the AT&T network is our primary as our primary network and to supplement that with T. Mobile's network, where we have a lot of customers already on T. Mobile that we don't have to move off.

The short term so.

That's a pretty good place to be.

Obviously.

We can't show you the economics of that with you per se, but that models.

I think you could you can figure that out.

And then the follow up Charlie you've obviously been very outspoken about retrans and sort of the shift with content thoughtful linear.

Linear broadcast TV and how it less and less important as ratings have declined.

Obviously, not having stations up was problematic for your subscriber numbers.

Was this a win win I mean, I'm sorry within the wind for dish loss produced like how do you. How do you think about how you fight the rising tide of retrans costs against the dramatically falling ratings and viewership of broadcast television it seems like a very challenging quandary for you.

Well I mean it.

I assume you are talking to attack that I've always felt that that anytime you get to a program dispute. It's a lose lose situation has never it's never it's never it's never a win situation ruin guy or the other it's always a lose lose situation technologically the fair amount of capital.

From us they probably sold their company a little bit cheaper than they otherwise would have.

We obviously lost customers during I mean, obviously, we prove that you can go to a football season without a network. So.

As the NFL is more widely available.

Places, but we did lose some customers who who.

Occasionally you know who watch the networks and then felt they were important so.

Said this before the value of Retrans is going down not up.

For all the reasons you just stated.

The place you could fight it as I mean, one places as consolidation in the industry. Because then you then it gets to be a little bit fair fight today today that the broadcasters are monopolies, yet yet nobody in the video business.

Is anywhere close to that so.

So that's one place you'll find that the second places it'll it'll died.

Die a death on its own if people try to overcharge for the product and we've seen that with other other programmers who who.

Just refused to see where the.

Things were going in at some point they self destruct.

But it hasn't fundamentally changed your approach to Retrans going forward.

Well I mean again I'll say is that the 100 time is we're unique maybe as a company, but we do look at the value of the programming to our customers. So we have real time data.

Many people watch it mean and how long they watch it we can we can we can use an algorithm to come up with a pretty good range of where we think the value of the programming is we always then we'll overpay, we always will overpay, because we have to value the customers that we lose.

And then we have a number.

If we're at acts and somebody has to X, we're not going to carry it because it's more beneficial for us not to pay the money if their it if they get to ask we'll do a deal there X plus one we won't do a deal <unk>.

<unk> was two acts.

Happen right, we lost subs they lost revenue.

Yes.

But when football season was over you know it was.

They didn't have what was the leverage right.

Yeah.

I mean, that's just the way it goes unfortunately, it's too our customers.

Our customers like us we get high scores in our industry. They hung in there with us. They are fair more than you would think of our customers agree that they don't want their costs going up and they appreciate the fact that we're willing to they are not willing to not rollover and play dead in negotiations and we know it.

At the end of the day, we got to a fair deal with Technip.

That's beneficial to both parties.

And beneficial to our consumers. So we don't have to raise your price as much as everybody else is going to have to raise prices.

Thank you very much Charlie.

We will now take our next question from John Hewitt or lack of UBS. Please go ahead. Your line is open.

Great. Thank you.

Maybe for Charlie just are there any early indications of how the network in Las Vegas is performing in terms of signal quality or speed or capacity in and you mentioned that you said performing well win when it's working I mean, I guess without getting too technical.

Sort of why it doesn't work when it doesn't.

Youre accurate overcome those those those roadblocks and then secondly.

You mentioned, the wholesale agreement with AT&T or you guys loading traffic onto the AT&T network. How is it sort of like all new gross adds on the prepaid side are going onto the AT&T network and is there any reason behind what you guys have announced.

To cooperate on the.

Network deployment side sort of more holistically with AT&T.

Yeah, I'll, let John take the second part I was I've been I've got about Las Vegas every month. So it gets you kind of the progress, but I was there I was there yesterday and so.

The.

Where we've optimized the network speeds are good and it works well, we have and optimize the whole city and so.

Fun fact, just for you guys, but you know obviously your team takes you did your team takes you to the places where we've optimized the network, but obviously before we got we lap.

We went to we decided to go to.

Places, where they had an optimized.

We had some issues there so.

So the good news is we know we know.

We know when we get to optimize them.

We make it work and again.

For me personally it is.

One of the greatest achievements. This company has ever had I mean, it just there's nobody.

I can't tell you how important.

Network, Ryan truly running in the cloud and Oran principles I can't tell you how important that is going to be and where this industry is going to go and how this is the United States can suddenly get some leadership back that they gave away years ago.

How it brings a whole set of people in that are creative it's like developers come in you get a whole lot of people in creative had been locked out because.

Today networks are really primarily Nokia and Ericsson and Theres, a whole set of people that would like to come into the network and have things to offer and techniques and technology to do so it was it was beyond impressive.

To me.

See it work, having said that we have we have that only caution to that.

It's that we have a lot of work to do to make it work everywhere and to light up.

Five cities in the next 100 days major that's a lot of work so.

The good news is we're going to get there the bad news is we're not there yet.

Got it and this is John on the second half of the question regarding AT&T.

So this quarter, we are loading a substantial portion of our boost mobile customers onto the AT&T network we've.

We've been working closely with AT&T to flow water through the pipes and make sure that everything is working well so.

So that we can provide a great customer experience, we're also enabling Republic wireless and some of our other brands.

Load onto AT&T, so youll see us pick up our activities and our efforts there.

It is on a new technology stack.

We're building two new technology, not only for the network, but for our retail business and.

We're pleased with our progress there and we'll be great capabilities has returned to growth.

And you had a question about network sharing I apologize I didn't answer but.

There's lots of potential for that is what I would say with any of the vendors are any of them.

Between any of the incumbents.

<unk>.

Industry, you're starting to see some you saw some network sharing announcements in Australia between I think Telstra and TPG Telecom I think you have network sharing in Canada today.

The U K.

Given the new builds that people are doing given maybe where people have adjacent spectrum.

You can see where that.

You can see where that could make some sense right and certainly I think all of the operators will probably look at that we probably look at it more than anybody else because we haven't built out our network yet everywhere. So.

We're a little bit cleaner sheet of paper, but but we also have a different technology. We don't want to go back to last decades. We don't want go back to last decades network. We want to we want to go or where things are going and make sure that.

That we don't have to carry a bunch of legacy round.

Got it thanks guys.

We will now move onto our next question from Jonathan Chaplin of New Street Research. Please go ahead, Sir your line is open.

Thanks.

Quick questions. If I may I can't got nine questions, but I'm going to narrow it down to two important once on the dead Sea.

<unk> and the 345 gigahertz spectrum.

You've got as you mentioned at the beginning Charlie a really nice 50 megahertz.

<unk> of spectrum, what needs to happen for you to be able to use that as a as a 50 megahertz channel you need power limits, but.

Between the two bound to be normalized by the FCC to the bat needs to be consolidated into a single three GPP band or can you use it as is.

As a as a single channel and then just following up on the last question.

You've got 50 megahertz, that's contiguous AT&T is right next to you with another 40 megahertz in the tweet up four five band neither of you deployed.

<unk> yet is that a band.

Is that an example of that.

Uhm, where it might make sense to you guys to deploy the balance together.

Sure equipment and deployment costs on that specifically.

Yes, Jonathan Youre always ahead of your time.

And you should you can do strategic planning for us.

The first question is that if you look at page four if people who have access to maybe look at page four it's a very simple chart to kind of shows you that we're that we think CBR S band is going to be the primary band for private networks, primarily because a lot of it is free and theres equipment available today and it's in phones. Today. So you can you can start deploying <unk>.

<unk>.

It's kind of it's kind of licensed because of SaaS, it's kind of it's all it's not quite but it's kind of it's kind of licensed and unlicensed spectrum.

But as you deploy a youre always going to want to have some priorities and that we're the only company with priority licenses across the country.

And then you're also going to want.

Super Super lice.

License spectrum, which is C band and of course. This case it has the added advantage of being full power.

If I were in charge of spectrum policy in the United States I would add I would without doubt take a real hard look at increasing the power levels and CBRE.

The C band.

Spectrum across the world as everybody in the World is at high power. So no nobody no we have to compete against other countries and they don't have this band in the middle of that slope, this lower power, which causes which which.

It has good news good news bad news, but it's more bad news and good news I guess is what I'd say, so I think there's a realistic chance that.

The regulators will at least look at it to say can we if we're going to compete against the world should we should we rethink that we've done analysis as to say that that you can have your cake and eat it too that mid the.

Mid power Zebrass on high power CBS can coexist, we're unique in that we're in both bands and so maybe Stephen you want to take this because I'm not maybe technical enough to explain it but but to make there is interference between the C band and CVR S. But because we are adjacent to each other.

There are some advantages there, but I'll, let Steve and maybe give you a brief tutorial, yes. Thanks Charlie.

Charles right.

Definitely looking at how do we find a path to increase the power level on cbre's, but notwithstanding.

Anything that we can still operate given the current standards on Crs and the adjacency with.

The C band spectrum, and so there are technologies that allow us to be able to manage that interference between the two different bands to.

To be able to leverage that spectrum in a common deployment models. So we have the ability to do that because of the adjacency. We can coordinate that in a way that allows us to maximize the utilization of that spectrum and as Jonathan as you correctly point, we paid over $400 million to get adjacent alright.

That was a bigger percentage than historically has been done but it certainly puts us in a better strategic position and then the last part of your question was about at AT&T for the vast majority of the country is adjacent to us and see bandwidth 40 megahertz.

Obviously, given that our relationship is they're both they're a partner to us in terms of their network today from a roaming perspective. There are certain certainly we are open to they may have they may know everything they need to do and they may have no interest.

Certainly.

From an economic point of view, we think there may be things you could that you could do together there between between C band and <unk>.

Given our position there.

Awesome. Thanks, Charlie Thanks, Steve.

Well now move onto our next question from Brett Feldman of Goldman Sachs. Please go ahead. Your line is open.

Yes, thanks for taking the question so yeah.

As for a long time has said that as you build out a wireless network built on cloud technology that you will inevitably have a cost advantage I think conceptually that's always made sense. As you've noted you are now actually operating a network on this technology that sometimes works the way you want it to so.

Yeah, Yeah, all that yet, but can you start to maybe give us an insight as to what you think that's sustainable operating cost advantage is going to be now that you have some evidence as to what you've been able to do in the field.

And then just as a follow up to that I think we all anticipate that when you launch and go to market youre going to be offering consumers, a really great value for the quality of service that you are delivering as you sort of flow through some of those cost savings to the consumer but I am wondering if the architecture that can be chosen has obviously been allow you to deliver features and functionalities that might be a competitive advantage.

We're not putting enough thoughts yes. Thank you.

Yes. This is mark <unk>, yeah, we're starting to see benefits.

Certainly seeing benefits in the cloud now.

Something that is pretty costly for existing operators, which is to test new software.

And to onboard new innovation, and we have a speed and capability to do that that is.

Truly comparable to the cloud and we have much more automation. So we require a much smaller people and when we scale, we think that will give us.

The benefit of speed emulation, but also of costs.

We are also seeing.

You open run in all the open ran two days he's working in Vegas and in other markets, but we are starting to see a lot of new.

<unk> and benefits from the open ran.

Ziv ability, which means you can see things you can see all the quality of service. It will be you can see the benefits of your footprint.

You can see if you need new small sales are not in a way that was hidden inside Nokia and Ericsson in the past so that gives us a huge benefit over time to optimize the network and a return on our network in a way that nobody has done it and we're starting to capture the data.

For engineers like me, it's it's pretty much a incredible what we can see so yes, we're starting to see the benefits it's going to be a journey.

I think we have debated line now and we're going to explore that in the coming quarters.

The other thing is on the private networks I can't imagine.

Now I can't imagine and ammunition.

But network, operator, or somebody who wants to do it not going with Oran principles right and so I think that we are.

Because you just got to get the cost down and you don't need a sophisticated a core you don't need it you don't need some sophistication and private networks that you're kind of getting paid for.

Given where the incumbents are so.

I think thats another place that we have.

<unk> advantage and then and then to features that the cloud and our architectural give me. The answer is yes. There are there are any number of them, we can't even predict probably some of them that will be there, but there are certain things that we'll be able to do in our network for consumers that I think may be more difficult or we can do more efficiently.

For our consumers and others and we're looking at a number of those things.

As we go on as we're able to go on offense.

Perhaps be able to roll some of those things out it maybe not maybe its a 2023.

Vince but.

I only gave you a history in DBS.

The main architecture development with digital.

And the first thing we rolled out was interactive guide that was a big difference in us growing guide in the analog world.

We gave a better picture right, but then because we were digitally we could do the DVR.

We don't quite get the history of <unk>.

For helping to invent the DVR, but we were the key player.

With the DVR and then once you hit a DVR of course, you could skip commercials, which.

I don't know that I could watch TV, if I had to watch all the commercials.

The.

One innovation leads to another and I think I think that's going to happen here too.

Okay. Thank you.

We'll move onto our next question from Bryan Kraft Deutsche Bank. Please go ahead. Your line is now open.

Oh, hi, thanks for taking the question.

Two quick ones first can you just give us a sense for the timing of the $250 million that you've incurred related to the CDMA shut down and how much more you might think you might be committing to that effort just as we built our models and then secondly, any update on the supply chain issues and or labor constraints as it relates to your ability to construct.

The network it sounds like.

You've accelerated the plan, which is great. Despite those issues, but just love to understand how you've been able to do that and how much of a concern supply chain is at this point going forward. Thanks.

Yes. This is Paul I'll take the first part of that question, yes, the $250 million. The majority of that happened in the second half of the year as we were trying to meet the 12 31 deadline.

So we're now talking about the future.

Yeah, we're in a similar situation sort of as we worked through the first half of this year with respect to come.

Customers that.

We're serving.

We sort of need to restock them right. There is a step to put new handsets in their hands to swap some cards and to incentivize them to come into our locations and work with us and so we'll be continuing to see that through the first half of this year.

As a headwind, but then we'll work through that as well.

Get into the second half of the year as Charlie said earlier, we will have.

Two competitive networks as well as our own coming online and as we.

We're able to bring in more handsets to compete and to grow our business will be will be more competitive with the CDMA shutdown behind us.

And then as far as.

You never know where supply stuff, but certainly certainly labor is an issue there certainly inflation in wages or certainly the fight for talent in some of the key talent, we need and some of the technology as you know there's big companies that.

Scoop up a lot of that but a lot of people want to come to work here. We have some we're doing something a little bit we're doing something very interesting and particularly from an engineering perspective to build the kind of network. We're building is very attractive to people supply chain.

Yeah.

We certainly keep our eye on it because it's worrisome.

We were not far enough along into next to the next development to know whether it's going to come.

Come up and bite us, but to the credit of the team we managed through some incredibly.

Difficult times to get to the first milestone.

We battle do incredibly tough times to build a network when people aren't coming to work at dish they were coming to work, but all the people that were a lot of our vendors people were outward zoom calls and you just don't solve problems on zoom calls with the speed that you do when you got a whiteboard and youre altogether. So.

Right.

We don't have a lot we don't allow excuses here so.

We're just going to make it I guess I don't know how to say any other way.

We internally, sometimes crying or bigger about something not going right source, but at least externally. We don't have excuses, we're just going to make it.

Operator, we have time for one more from the analyst community.

We will now take our final question from me.

Community member.

Members on the media call. Please press star one to enter the queue to ask a question will begin the media portion of this call. Following the answer to this final analyst question.

Our next question comes from Craig Moffett of Moffett Awesome. Please go ahead. Your line is open.

Thank you too.

Two questions if I could squeeze in at the end here.

One is.

Charlie at the conference.

So you talked about a bit that you've got for your spectrum.

I'm wondering if you could just put any meat on the bones about that and then separately. This past quarter. There were renewed reports of the prospects of a merger with Directv I'm wondering if you could provide your latest thinking on.

The prospects for that actually happening regulatory and.

And in terms of being able to strike a reasonable deal.

And your first question you know, obviously, obviously, we didn't own the last $7 billion of spectrum. So let me just put that aside but from time to time, we certainly have seen interest and bids from people for the company and we certainly said from time to time interest a particular piece of spectrum.

History will show, whether right or wrong, but we've always felt like the best use was to build a new company and build the company around it and that the best use of it was for us to.

To manage that we have a long term view, we realize everybody in this call does not but we had a long term view, it's certainly taken longer than we thought.

Because we werent able to get going and LTE <unk>. So we had to wait for the next paradigm shift.

The obviously I've said, it's I think it's inevitable that that that dish and Directv go together otherwise both companies will just melt melt away and there'll be no service for customers the regulatory.

Reasons to not allow it don't exist anymore.

So you know and I think from a timing perspective, I don't I think it's inevitable I don't know the timing of it I guess is what I'm, saying.

You know what this is a little bit off such as this was the last question, but for the analysts on the call I realize that we haven't been a company that that that talks a lot to analysts and we don't always share our strategies and part.

Because we don't want our competition to our strategies, but where our strategy is pretty well in place now.

We had to get through this kind of double bank shot in the last two auctions and we didn't really want to talk about where that might lead.

But now we pretty much we.

Pretty much not pretty much we have in place almost all of the strategic things that we need to be to be a very big successful company. So we are going to do an analyst day I don't think we've done one in 15 years.

We aren't going to an analyst day in Las Vegas on May 10th.

But then on your calendars you can come out an experienced network in.

But yet, but we're also going to share a lot more with you in terms of.

Where we're trying to go and I hope that we'll be able to give you enough information to improve your models and I think youre going to see the company being a lot more responsive in terms of.

Let you know a little bit about where we're going to we're going to be going because we're excited about the fact that we've got the pieces in place now so.

Mark that calendar, we look forward to seeing people, there and getting feedback on that.

So with that maybe we take media calls.

We will now take questions from members of the media again, if you are a member of the media and would like to ask a question. Please press star followed by one now to enter the queue to ask a question.

And our first question from the media comes from Scott <unk> of Bloomberg. Please go ahead. Your line is open.

Great. Thanks, Yeah, Hey, Chuck.

Thank you.

You mentioned private networks seems to be a pretty hot topic, especially this week among.

Many.

Looking for an opportunity in <unk>.

If you could help me and I hate to put you on the spot to explain it to the entire industry.

What do you how would you describe.

The revenue model the business model the business case for.

Private networks to IP.

And so it's a broad question that the biggest revenue model. The model is I think pretty good for a lot of the people we're working with today so.

The if.

If you're a company and you had a private network. The reason you'd want to do that is because you want it's very similar to why.

<unk> wants to go direct to consumer you don't want a middle man in the middle and you.

Once that you want the data. So you can make your product better and you don't need a middle man in the middle.

For companies that have a campus or a manufacturing or a city or.

Our fleet of vehicles are you name. It if you have a private network.

Now you can get the data.

You can if you're a John Deere you get the data on all your tractors, you make a better product and you can have a more efficient product and so and you also know mechanically when you have a problem before you have a problem. So customers love. It because you have a better product and it's less expensive and it's better and safer.

So so the CIO is the company immediately.

They kind of figured that out so the revenue model then is for the things they need for private networks. They need Wi Fi right. So think Cisco in my head I think Cisco right, they need cloud, Microsoft Amazon, Google and others right they need they need.

Unlicensed spectrum, thanks, Steve you're asked but they need licensed spectrum thing one of the four incumbents, particularly dish they need core thing.

We think people.

People like Nokia or think about people, who who build.

Smaller cores right or they are open course, if people can add onto.

And so you can.

You'd think transport.

I think think about towers and tower builders.

And the people that I saw with Nate yesterday, right all of those things kind of come together and how do you do that who puts it together so for US. The revenue model is kind of the goalposts are kind of on the one end what I would call Capex light, where somebody just leases our capacity that's really all they do we don't spend any capital they lease capacity there.

They're just a really big.

Customer they are like.

Thousands of handset customers right, but theres, just one customer and then our tens of thousands or hundreds of thousands of customers and the other side somebody may want a private network and they may and they may get a contract and you have a long term contract, but you spend the money to build it out are your partners do or some combination of that so.

That's the revenue amount, but I'd be shocked if the fortune 500 companies. If we sat here five years from now that the majority of the Fortune 500 companies didn't have private networks.

Yeah.

That's very helpful. Thanks.

Okay.

And it appears we have no further questions over the audio I'd like to turn the conference box for any additional remarks.

I think I think may 10th I think I think may 10th we might even do earnings call on may 10th, but we'd certainly will well hopefully.

So you see a lot of folks on the call in Las Vegas. Thanks for your time, Thank you operator.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Okay.

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Yes.

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Yeah.