Dish signs 10-year AT&T network service deal worth $5 billion

US satellite TV operator Dish Network has signed a 10-year strategic services agreement that will see AT&T replace T-Mobile US as the network provider for its approximately 10 million mobile virtual network operator (MVNO) customers.

The agreement gives Dish Network access to AT&T's roaming and transport services, which the company will leverage for 5G service as it deploys its own facilities-based network.

Dish Network said it will also use AT&T's network to offer wireless service in rural markets, where it currently offers satellite service.

John Swieringa, Dish Network's chief operating officer and president of its wireless retail group, explained that the deal will bring "enhanced coverage and service" to subscribers of its Boost Mobile, Ting and Republic wireless MVNO businesses.

Just last week, AT&T announced that its 5G network covered 250 million users in the United States, a milestone that Dish Network called positive news for its customers.

The operator, which owns Dish Network's biggest satellite rival, DirecTV, is in the process of spinning off a 30% stake to TPG Capital.

The terms of the agreement allow AT&T to access Dish Network spectrum for its own customers in certain markets.

In a filing with the U.S. Securities and Exchange Commission, Dish Network said it will pay AT&T at least $5 billion over the life of the agreement.

Colby Synesael, senior equity research analyst at Cowen and Company, estimates that Dish Network could pay AT&T more than $500 million a year in the first few years of the agreement, with that payment set to decline as the upstart operator is able to rely more on its own network.

Synesael added that the deal appears to reflect Dish Network's frustration with T-Mobile US.

T-Mobile US urged the Federal Communications Commission to revoke the auction of licenses for the 12GHz spectrum band, where Dish Network owns a large number of licenses and currently uses them for satellite services.

In addition, T-Mobile US plans to shut down its CDMA network, posing a threat to some Dish network users.

Dish Network is building a cloud-native open RAN network, with wireless handled through its MVNO business, which was established through the acquisitions of Boost Mobile, Ting and Republic Wireless.

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