Dish Network has hired Qualcomm to develop specialized chipsets for a hybrid satellite-terrestrial wireless service, its latest attempt to convince the government it is serious about getting into the mobile broadband market.
Dish is waiting on key regulations from the FCC that could allow it to use up to 40 MHz of former satellite spectrum for an LTE network.
Without them, the use of Dish's 2GHz licenses is limited to phones that have to incorporate satellite connectivity, a requirement that makes devices more expensive and less commercially viable.
"Our current licenses allow us to operate in dual mode today. However, the likelihood of use moving forward in that environment is very low," Dish Executive Vice President Tom Cullen said in an interview. "It would not be a competitive service because of the burden of cost associate with the dual mode requirement."
A number of companies like Iridium have failed at hybrid satellite-cellular model. Potential customers for the Dish service include outdoor enthusiasts, workers in remote areas and parents trying to keep tabs on children outside of cellular coverage.
Cullen says the combination satellite/cellular devices are intended to be part of a niche service Dish may offer as a supplement to its planned LTE network. The offering will be too expensive and have too small a customer base to be commercially viable on its own, Cullen said.
"This is a risk-based investment," Cullen said. "We're spending money without the certainty of the FCC outcome, but this is a component where we already have the licenses to operate."
The FCC earlier this year approved Dish Network's acquisition of satellite licenses from Terrestar and DBSD, but denied Dish's waiver request in favor of a formal rulemaking process, currently underway. The commission closed comments on the Dish docket on June 1. It is unclear when the agency will announce its official decision.
The Qualcomm chips will be used in hybrid satellite-terrestrial devices currently licensed for use on Dish Network's 2 GHz spectrum, acquired through the acquisitions of bankrupt satellite companies Terrestar and DBSD.
The chips employ Qualcomm's EGAL (Enhanced Geostationary Air Link) technology, a 3GPP-based standard brought to market as part of a 2008 tie-up with Terrestar and ICO. LightSquared planned to use the standard for its now-defunct hybrid satellite service. If Dish goes live with its EGAL devices, it would be the technology's first commercial deployment.
Dish's partnership with Qualcomm is one of a number of steps the company has taken to repudiate claims that it bought its 2 GHz spectrum as part of a scheme to sell the licenses to an operator like AT&T or Verizon Wireless at a massive profit.
“We can try to convince people all day long, but this hasn’t been an overnight thing,” Cullen said, pointing out that Dish has spent “serious money” on its spectrum licenses and technology development. “This is an adjacent market that provide a natural next step – voice, video and data on a fixed or mobile basis.”
The FCC's current rulemaking would automatically strip Dish of its licenses if it fails to meet three-year and seven-year deadlines on its LTE buildout. The company has asked the FCC for more lenient buildout requirements.
T-Mobile USA and MetroPCS want the FCC to make Dish Network give up half its spectrum in exchange for the right to use the licenses for a land-based LTE network. The divestiture could give the spectrum-strapped operators a chance to acquire additional licenses.