Dish Network Corp. (DISH) is planning to offer fixed-wireless broadband in trial markets, an expansion of a partnership with Ntelos Holdings Corp. (NTLS) that could signal the satellite-TV provider’s broader wireless plans.
Dish will begin selling the service in several Virginia cities including Roanoke and Charlottesville in early 2014. The goal is to reach 500,000 homes, Dish and Ntelos said in a statement.
Bundling fixed-wireless broadband with Dish’s video service will give the third-largest U.S. pay-TV provider a more robust offering to compete against cable and telecommunications companies that provide high-speed Internet. Dish is attempting to acquire LightSquared Inc.’s wireless spectrum out of bankruptcy and already owns airwaves that could be used for a fixed-wireless service if it builds a network.
“With nearly a fifth of U.S. households underserved by broadband, a fixed wireless solution could deliver an additional broadband option to millions of consumers,” Tom Cullen, Dish’s executive vice president of corporate development, said in the statement.
Fixed-wireless broadband uses signals from airwaves for Internet access instead of cables. Speeds in trials have ranged from 20 megabits per second to more than 50 megabits, the companies have said. That’s comparable to standard high-speed cable broadband and faster than satellite broadband.
Dish rose 0.3 percent to $49.28 at the close. Ntelos, based in Waynesboro, Virginia, rose 0.2 percent to $19.07.
Using spectrum for a fixed-wireless product isn’t Dish chairman and co-founder Charlie Ergen’s first choice, Tim Farrar, an analyst at TMF Associates Inc., said in an interview. Ergen’s preference is to find a partner that offers nationwide wireless service so that Dish customers can receive full mobility instantly, he said.
“Just doing fixed broadband is a low value use of spectrum compared to using it in a mobile network,” Farrar said. “But he may go ahead with a build-out if he thinks no partner is going to emerge any time soon.”
Dish attempted to acquire Sprint Corp. (S) and Clearwire Corp.’s spectrum earlier this year before abandoning the effort. SoftBank Corp. (9984) eventually agreed to a $21.6 billion takeover of Sprint.
Dish also offers a satellite broadband product to rural consumers who may not have access to Internet from a cable company, Verizon Communications Inc. (VZ)’s FiOS or AT&T Inc. (T)’s U-verse. Dish, based in Englewood, Colorado, ended the second quarter with about 310,000 satellite broadband subscribers.
Verizon and AT&T have also experimented with fixed-wireless broadband products using external home antennas. More recently, AT&T is trying out an in-home receiver, which use cellular network connections to provide high-speed data access and phone service.
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