DISH Jumps Into the Wireless Fray
A report released by telecom infrastructure and services provider Ericsson (NAS: ERIC) predicts that by 2016, mobile data traffic will have increased by a factor of 10. In other words, the number of mobile broadband users will more than double each year for the next five years.
That means there will be a bitter fight for the means -- spectrum and networks -- in which to accommodate all those users.
DISH Network's (NAS: DISH) plan to be one of the 4G LTE networks that these wireless customers will end up using has just cleared an important obstacle.
Last summer, DISH bought two satellite operators, TerreStar and DBSD, in bankruptcy court. But Sprint Nextel (NYS: S) claimed that both those companies owed it millions of dollars in bandwidth fees. DISH just settled with Sprint as the latter company sought to deny TerreStar's and DBSD's spectrum to DISH.
But Sprint is still opposing another aspect of DISH's mobile broadband plan, the part where the TerreStar and DBSD resources will be used to operate a satellite/terrestrial LTE network. DISH would then be a direct competitor with LightSquared and another complication in its star-crossed attempts to roll out its own satellite/terrestrial LTE network.
After Sprint turned its back on Clearwire's (NAS: CLWR) 4G WiMAX network and essentially gave it a no-confidence vote, it signed a deal with LightSquared to provide it an LTE network. But that plan has been upset by the GPS industry claiming that LightSquared's network will interfere with GPS systems.
As another thorn in LightSquared's side, instead of being opposed by the GPS industry -- as LightSquared has been -- DISH has received an endorsement from the U.S. GPS Industry Council.
Now, Sprint and other potential users of a LightSquared network, such as T-Mobile and MetroPCS (NYS: PCS) , have been opposing DISH's entry into the satellite/terrestrial wireless circus. The two largest wireless carriers, AT&T (NYS: T) and Verizon (NYS: VZ) , haven't taken sides in this, as their LTE deployment plans are not incumbent upon either satellite operator's plans.
The FCC has not yet ruled on whether or not LightSquared can unleash its network, but DISH jumping into the fray throws even more uncertainty into LightSquared's future -- and, by association, Sprint's. Not surprisingly, Sprint has been taking another look at Clearwire as a potential LTE partner.
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At the time this article was published Fool contributorDan Radovskyowns shares of AT&T. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.