As far as industry analysts go, MoffettNathanson is one of the names that the tech world usually pays attention to. While no analyst’s opinion should ever be taken as fact, MoffettNathanson’s track record of predictions and breakdowns has proven fairly good over time. That said, when they say something about the ongoing FCC spectrum auction, it may be a good idea to listen. What they’re saying this time is that Dish, one of the biggest cable operators in the US, has had their position in the auction downgraded because of the price of their spectrum. According to MoffettNathanson, Dish holds mid-band spectrum. While it’s incredibly useful for network buildout, increasing capacity and upping data speeds in high-traffic areas, most carriers either have plenty of such spectrum or are more in the market for the low-band spectrum being offered elsewhere. Essentially, they’re saying that the U.S. carriers won’t bite and Dish will be left holding onto their spectrum by the time the auction is over, since it would be vastly less useful to anybody but these carriers.
As part of the downgrade, MoffettNathanson suggests that Dish sell out entirely. They stated that Dish may be a bit more limited on options when it comes to getting rid of its spectrum as promised. Reportedly, the possibility of buying out their spectrum with company equity and exiting cleanly is already off the cards, as is simply finding other buyers. While Dish could always launch an MVNO like other cable companies are doing these days, or sell to somebody who’s doing that, their mid-band spectrum is quite common among cable providers and thus wouldn’t fetch quite as much as Dish is wanting for it.
Some allege that if Dish were to lower their prices, the US carriers would flock to buy up what they have in order to expand their existing networks into new areas and increase capacity in urban areas while their customers wait for the rise of 5G. MoffettNathanson is not saying that the spectrum is not worth what Dish is asking, but that US carriers are in no financial position to buy it. Since Sprint is sitting out the auction, that leaves T-Mobile, whose pockets aren’t the deepest to begin with, Verizon, who has committed themselves to a massive densification effort using existing spectrum that’s going to eat up most of their free cash for the year, and AT&T, who is working on a fiber-based network buildout that will add more nodes, expanding coverage. It should be noted that T-Mobile is also not in desperate need of mid-range spectrum.