Valued at $5 Billion: Dish and AT&T Sign A Ten-Year Network Service Agreement

American satellite TV operator Dish Network has signed a ten-year strategic service agreement, which will enable AT&T to replace T-Mobile America as the network provider for its approximately 10 million mobile virtual network operation (MVNO) users.

The agreement enables Dish Network to obtain AT&T's roaming and transmission services. When deploying its own facility-based network, the company will use these services to implement 5G services.

Dish Network said it will also use AT&T's network to provide wireless services in rural markets, where it currently provides satellite services.

John Swieringa, chief operating officer of Dish Network and president of the wireless retail group, explained that the transaction will bring "enhanced coverage and services" to its MVNO business users of Boost Mobile, Ting and Republic wireless.

Just last week, AT&T announced that its 5G network covers 250 million users in the United States. Dish network said this is a milestone and good news for its customers.

This operator owns DirecTV, Dish Network's biggest competitor in the satellite business, and is currently splitting 30% of its shares to TPG Capital.

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

In a document submitted to the US Securities and Exchange Commission, Dish Network stated that it will pay AT&T at least $5 billion during the agreement period.

Colby Synesael, a senior equity research analyst at Cowen and Company, estimates that in the first few years of the agreement, Dish Network may pay AT&T more than $500 million a year. As this emerging operator can rely more on its own network, This fee will be reduced.

Synesael added that the deal seems to reflect Dish Network's disappointment with T-Mobile America.

T-Mobile USA urges the Federal Communications Commission to re-auction licenses for the 12GHz frequency band, and Dish Network has a large number of licenses for this frequency band, which is currently used for satellite services.

In addition, T-Mobile America 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, which is handled by wireless through its MVNO service. The business was established through the acquisition of Boost Mobile, Ting and Republic wireless.