Kagan: Wireless deal good for DISH, AT&T, but not for T-Mobile US

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Congratulations to both Dish and AT&T on this new deal. And sorry to T-Mobile. Earlier this week there was a major announcement. Dish will be an MVNO reseller of the AT&T Mobility network. That’s great news for Dish and their investors because they can finally get into the wireless business. It is also great news for AT&T and their investors as this is a big, new, long-term financial win for the company. T-Mobile, no so much.

If Dish can be successful at wireless, this can be great news for the wireless industry as a whole. Until last year, we had four top national wireless providers. At the time there were two stronger competitors, AT&T and Verizon, and two weaker ones, T-Mobile and Sprint.

After the T-Mobile/Sprint merger there are now three strong competitors. To make the deal happen, Dish got on T-Mobile’s side saying they would become the fourth largest competitor.

This was enough to win approval after several years of trial and error.

AT&T won $5 billion, 10-year deal with Dish

Since that time, T-Mobile with Sprint hit the ground running. But instead of working with Dish, helping them get started, seemingly they pulled the rug out from underneath them.

T-Mobile announced they would discontinue the portion of their network that Dish was going to use in an MVNO resale fashion. While this was going to happen at some point, Dish and the regulators, in fact everyone expected they had three years.

T-Mobile had other plans. This was a seemingly low blow dealt to Dish, who has been struggling to find a way to enter wireless ever since.

Now with AT&T, the wireless future for Dish is clearer. Now Dish will resell AT&T Mobility as an MVNO, as they build their 5G network.

We have to remember business deals are not static. Rather they are decided by human beings. And when a wrong is done, it creates animosity, and you never know what will happen next.

Dish and AT&T win, and T-Mobile loses

Dish has made progress over the last year. They acquired several smaller wireless players and resellers and filled several executive positions. However, we expected to see them move into the wireless industry as the number four competitor already.

Something which still has not happened.

I think there were several factors that made AT&T more attractive than T-Mobile to Dish and Chairman Charlie Ergen.

One, AT&T owned DirecTV and that was a rub with Dish. Now that AT&T spun off DirecTV, they can be worked with from the Dish perspective.

Two, since the merger with Sprint, T-Mobile seems to be pulling up the ladder leaving Dish in a weakened competitive position. This forced them to look for another alternative.

I think T-Mobile probably thought this was a great competitive move. What they failed to realize is what would happen next.

That’s why it looks like a case of T-Mobile cutting off their nose despite their face.

Slapping Dish and Ergen in the face may have started a war.

T-Mobile learned what goes around comes around

They could have and should have left things alone for a while giving Dish the chance to get started. That was the original agreement. That was when they were on friendlier terms. That was when T-Mobile needed Dish to acquire Sprint.

So, in reaction to this move, Dish smacked down T-Mobile.

The bottom line is this bad behavior by T-Mobile will cost them big time. The Dish, AT&T deal is worth at least $5 billion over the next decade. Not too shabby.

That’s what T-Mobile lost.

Any way you slice it this deal is good news for both AT&T and Dish and bad news for T-Mobile.

Dish must build tangible brand in wireless marketplace

Next, we will see how well Dish will compete on the wireless state.

Remember, this deal let’s Dish start competing in wireless. However, it does not guarantee Dish wireless success. That will have to be earned.

Success will only come if Dish shows acumen in marketing, advertising and PR to create a tangible image, story and brand that customers want and choose.

The wireless business is a tough one to win at.

There have been many successful companies who have tried and failed. Remember when Facebook and Amazon Fire Phone entered wireless several years ago. They failed.

The same happened with the cable TV companies Comcast, Charter, Cox and others at the same time. Now cable TV has shown some success in wireless with their re-launch.

Can Dish do the same? To start, Dish will be the same as cable TV competition. They will be a reseller.

However, over time as they build and integrate their own network, they will have a real competitive advantage compared to Xfinity Mobile, Spectrum Mobile and Altice Mobile.

Will Dish be successful at wireless?

While I hope Charlie Ergen and Dish can be successful at wireless, and while I am happy for the size of this deal for AT&T helping in their recovery, the question remaining is still front and center.

Now is the time for Dish to jump in and make it happen. They need to create a string of news releases to catch the attention of the marketplace. They need to build a strong brand.

I hope they have thought about a real strategy for building their new brand. They must be successful at marketing, public relations and advertising.

Dish has one chance to make good first impression

Dish must create a successful brand and image in the minds of the marketplace. They only have one chance to make a great first impression.

They can’t blow it. Making the wrong move right from the start will be a disaster. If they do, they will then have to un-do the damage, then recreate the proper image.

That’s why Dish must hit a home run right from the start. Now is the time for them to introduce their wireless service to the world. Good luck!

About Author

Jeff is a RCR Wireless News Columnist, Industry Analyst, Key Opinion Leader and Influencer. He shares his colorful perspectives and opinions on the companies and technologies that are transforming the industry he has followed for 35 years. Jeff follows wireless, wire line telecom, Internet, Pay-TV, cable TV, AI, IoT, Digital Healthcare, Cloud, Mobile Pay, Smart cities, Smart Homes and more.

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