By Shalini Ramachandran, Laura Stevens and Ryan Knutson
For years Dish Network Corp. Chief Executive Charlie Ergen has
sought out deals and partnerships with just about every major
telecom company, from Sprint Corp. to T-Mobile US Inc. to AT&T
Inc. -- so far, to no avail.
Now, the satellite-television mogul is turning his attention to
the technology world and a new -- and somewhat surprising --
potential partner has emerged: Amazon.com Inc. CEO Jeff Bezos.
The two men -- eccentric billionaires with geek tendencies and
shared interest in space and robotics -- have gotten to know each
other better over the past year and have discussed a partnership to
enter the wireless business, according to people familiar with the
matter.
Among the ideas: Amazon could help finance a network Dish is
building focused on the "Internet of Things" -- the idea that
everything from bikes to Amazon's drones can have web connectivity
everywhere. Another idea is that Amazon, as a founding partner of
Dish's new wireless network, could offer an option for Prime
members to pay a little more a month for a connectivity or phone
plan, one of the people said.
No deal is imminent and it is unclear if the companies will move
forward with a partnership. Dish has discussed versions of the
"founding partner" concept with other technology firms, one of the
people familiar with the matter said.
Amazon "is taking a walk vs. a run approach with Dish," adds one
person familiar with the talks. The two companies struck deals in
May that allow some Dish customers to control their set-top boxes
through artificial intelligence assistant Alexa on Amazon's Echo
speakers and make Dish streaming-TV apps available on Amazon Fire
devices.
An all-out acquisition of Dish by Amazon is highly unlikely, the
people say.
Amazon and Dish declined to comment.
The possibility of an Amazon-Dish tie-up comes amid a swirl of
deal and partnership talks in the wireless industry. Cable
companies, tech giants and the incumbent telecom carriers are all
trying to position themselves as smartphones and the mobile web
capture more of consumers' attention, and as Washington regulators
throw up new opportunities and obstacles.
Sprint Corp. was holding merger talks with T-Mobile before
putting those temporarily on hold to explore a deal with Comcast
Corp. and Charter Communications that could bolster those
companies' plans to offer wireless service. Some industry observers
think the Sprint-cable talks could push T-Mobile and its parent
Deutsche Telekom AG to rekindle deal discussions with Dish after an
earlier round in 2015 collapsed.
Of late, Messrs. Ergen and Bezos have been crossing paths more
often. They spent time together in March at a satellite convention,
where Mr. Bezos' rocket company Blue Origin LLC gave a presentation
to Mr. Ergen's EchoStar Corp., Dish's sister company that builds
satellite technology, people familiar with the matter said. Mr.
Ergen in March also attended Mr. Bezos' secretive, invite-only MARS
robotics and space conference. More recently, the two moguls met in
May in Seattle, other people familiar with the matter said.
The two executives are both eager disrupters: Mr. Ergen, who had
a stint as a professional blackjack player, founded Dish in 1980 to
take on cable TV and in 2015 launched Sling TV, the first online
live TV service aimed at cord-cutters created by a traditional
pay-TV provider. Mr. Bezos has upended business models from books
to media, and is venturing into food retail with Amazon's
acquisition of Whole Foods valued at $13.7 billion, including
debt.
Mr. Bezos is no stranger to uncertain terrain. "We look into the
future and we always see an intensively competitive environment, a
world that is awash in disruptive change and new technologies," he
said at Amazon's annual shareholder meeting in May.
Joining with Dish on a wireless network could potentially
advance the online retail giant's ambitions in a range of new
businesses. It could give the company quality control over
connectivity for its Amazon Dash buttons -- which allow people to
reorder household goods easily -- and its Echo speaker powered by
Alexa. And it could help improve Alexa's technology by putting the
intelligence throughout the nodes of a wireless network, said one
wireless executive who has worked with Amazon and Dish, enabling
Alexa to be faster and more human-like in its responses to searches
due to proximity to users' locations.
Amazon could also offer a one-way broadcast signal for Amazon
Prime video on a slice of Dish's airwaves, ensuring shows and
movies stream without hiccups everywhere, one person close to
Dish's plans said.
It also could help Amazon's plans to operate a network of drones
delivering packages to customers, wireless executives and people
familiar with Amazon's thinking said. The company could "command
and control" those drones and "consider real-time changes in
directions or multi-stop delivery routes through messages from the
network," wrote Citigroup analysts speculating about a
Dish-and-Amazon partnership in the wake of a May report from
Satellite Business News.
Dish has been seeking to enter the wireless business for several
years as a way to diversify away from its shrinking core satellite
TV business. Dish and its affiliated entities have spent more than
$21 billion over the course of a decade to acquire airwaves
nationwide, but Dish lacks a network to deploy the spectrum and has
been on the hunt for a partner.
To meet a March 2020 government-mandated deadline to offer
service on some of its spectrum, Dish is building a bare-bones,
so-called "fifth-generation," or 5G, network that will cost less
than $1 billion.
Citi analysts said a partnership between Dish and a technology
giant like Amazon or Google could take many forms. Amazon could
become a "preferred customer" on a new wireless network and commit
to spending a certain amount on connectivity in exchange for a
below-market rate. It could also invest cash upfront in Dish's
network to help pay for the build out, in exchange for a
significantly-discounted price upon the launch of the network.
In a private meeting with investors and J.P. Morgan analysts in
May, Mr. Ergen indicated that he believed technology companies
could be looking seriously at the wireless business, especially as
the Trump administration seeks to roll back "net neutrality" rules
that were meant to guard against carriers extracting tolls from
content companies for better service, according to an attendee.
"They're going to have to make sure that in a world of net
neutrality...being eliminated, that they're positioned so that
they're not in a situation where their connectivity is clogged,"
Mr. Ergen said earlier in May.
Write to Shalini Ramachandran at shalini.ramachandran@wsj.com,
Laura Stevens at laura.stevens@wsj.com and Ryan Knutson at
ryan.knutson@wsj.com
(END) Dow Jones Newswires
July 06, 2017 05:44 ET (09:44 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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