Why DISH Mobile Will Fail


Hey everybody, David and David here from payetteforward.com
and upphone.com, and in this video, we’re going to explain why it DISH mobile will fail.
If you’ve missed the story, T-Mobile and Sprint are pretty close to completing their merger,
which would make DISH the fourth major Wireless carrier in the country, and we just don’t
see how it’s going to work out. And we’re not alone in this. Recently, a group of economists
some from NYU, Georgetown, the University of Utah, and Northeastern University got together
and they wrote a paper about why this is going to fail. So really, when it comes down to
is that they’re trying to justify this merger based on the fact that it’s going to increase
competition and be good for consumers, when in fact, it’s obviously not. Right. So there
are a number of problems with this. DISH mobile doesn’t exist. Right, first off. So we’re
kind of creating this merger, and then we’re saying that it’s going to work based on an
idea. And this idea is that DISH mobile is going to build out a competitor — a nationwide
competitor to Sprint and the new T-Mobile, they’re calling it, to AT&T and Verizon within
the next seven years. I don’t see it happening. Yeah, they say that they’re going to be able
to do this with a 10 billion dollar investment, which is not going to be enough. And if they
fail, which DISH has done in the past with other promises that they’ve made that have
been similar, they have to pay a fine of 2.2 billion dollars in 2023. The target that they’re
supposed to reach is 70% of American citizens, not 70% of America — but 70% of the population.
So if they reach 50% by 2023, they have to pay 580-something million dollars, which is
tax deductible to them, and then they have two more years to finish building out this
network. But people think that it’s highly unlikely that DISH will ever build out the
network, because compared to the Spectrum that DISH has… So the way this works is
that wireless carriers bid on certain spectrums, like 800 megahertz is DISH’s spectrum. T-Mobile
commercials; they’re talking about 600 megahertz. So DISH owns the spectrum and in seven years
— in less than that… That spectrum is worth way more than 2.2 billion dollars. Amazon;
Google; somebody’s going to come in and just buy them out. Yep, and then take over. So
the whole thing is based on a bunch of promises and a bunch of hope and guessing. Why don’t
we talk a little bit more about specifically what the plans are? But also something to
keep in mind is that T-Mobile can start capping DISH mobile after three years. So they can
impose these data caps. The fundamental flaw with this thing — another one — is that
T-Mobile is supposed to support DISH mobile for the next seven years, but DISH mobile
is their primary competitor. It doesn’t make sense that T-Mobile is incentivized. So the
DOJ comes in and they they invent all these rules for T-Mobile that they have to follow.
Right. Well, they have one person who is going to oversee those rules and make sure T-Mobile
sticks into them. But there are all these little; I mean, these people are smart. There
are going to be loopholes in this contract. There going to be other ways. Yeah, DISH gets
harmed and there are other consequences that people aren’t thinking about. So there are
the major Wireless carriers, which as you know are Sprint, AT&T, Verizon, & T-Mobile,
and they’re major carriers because they have actual physical infrastructure. And you need
to have physical infrastructure to be able to compete. Every other carrier in the U.S.
is an MVNO, which is a mobile virtual network operator. Boost Mobile. Yeah, Cricket Wireless.
You name it. It’s a subset of one of the four major carriers. So DISH mobile is going to
operate as an MVNO right off the bat of Sprint and T-Mobile the new T-Mobile. This isn’t
going to be good for other MVNOs or for other carriers. And here’s why: Right now, AT&T
and Verizon have very strong customer bases. So they’re not incentivized to sell off their
services to the smaller carriers at good prices. Right. But Sprint and T-Mobile are both smaller,
so they are incentivized to sell off their services to Boost Mobile or Cricket for lower
prices, which keeps those prices down on the MVNO front for the smaller carriers. If you
eliminate that competition between Sprint and T-Mobile for the wholesale prices of MVNOs
— of that of their service, then all the MVNO prices will go up. And so our lower cost
carriers are going to start to disappear because there isn’t competition. Verizon and AT&T
do not need to wholesale off their services because they have enough customers. Right.
Sprint and T-Mobile are the only competition. So if you look at it, you know, okay, there
are a big four; but really there’s only two — right — now that are competing to keep
the low-cost carriers low cost. This is one of the points they made in the Net Institute
paper. I think it’s a good one. Yeah, I’ll link to that in the description — description
section below. We took a look at that paper and really pokes a bunch of holes in this
plan that just kind of seems short-sighted. Yeah. I just don’t see how a DISH mobile is
going to be able to build a nationwide infrastructure with an initial budget of 10 billion dollars
in such a short time frame. No, and I don’t even think they’re going… I don’t think
they’re going to. I don’t even think they’re gonna try — not even gonna try, just sell
it off after the contract expires. Yeah, take the penalty and write it off on your taxes.
Then sell it to Jeff Bezos for a jillion dollars. You’re having to help me just make any sense
of this. The final paragraph of this document that the economists wrote: “This proposed
settlement would permit a four-to-three merger based on a remedy that accepts competitive
harms…” — meaning it does make sense that T-Mobile would have to help its number-one
competitor. That doesn’t make any sense “…competitive harms in the short and medium term, even based
on an exceedingly optimistic view of possible benefits in the longer term. This does not
represent good policy. Rather, it suggests a determined effort to invent a basis for
approval of a merger that is anti-competitive on its face. Indeed, if the substantial acknowledged
competitive problems with this four-to-three merger are remedied by the strategy of rearranging
some assets, negotiating some contracts, and then hoping for the best some years down the
road, it is unclear what merger would not be salvageable with the same scheme.” So this
is more than just wireless. This is setting a precedent legally where we’re able to justify
eliminating competition and saying, “Okay. This doesn’t violate antitrust laws based
on hope.” Based On A Wish. Yeah, so maybe it should be called WISH Network, and not
DISH Network where you go because it doesn’t exist. Right. And they’re just looking over
the — I mean, what’s going to happen to all these other MVNOs? If I was Cricket and
I was you know, I’d be like what the heck is going on? How come they get to be one of
the major four carriers when they literally have nothing more than I do as Boost Mobile?
Boost Mobile has more because they have a customer base of customers – yeah, they have
absolutely nothing more there. I just don’t understand. Yeah, it’s crazy, and we don’t
think it’s going to work. There’s still one big legal hurdle for this to be overcome in
California. If the merger gets struck down there, they’re going to appeal to the federal
court. And the way the federal court is comprised right now, they will probably approve the
merger. So there’s money changing hands here. I mean, it’s… I don’t understand why they’re
approving this. It’s based on hope. Yeah. I’m with you. It’s like it’s supposed to be
competitive, isn’t it? Doesn’t exist. It’s increasing competition by decreasing the number
of competitors… makes sense. Yeah, it’s clearly not. I mean, if there was another
competitor that could you know, if only there was a fourth carrier right now with, you know,
60 million subscribers, and its own infrastructure Network? Yeah, like Sprint and T-Mobile! Why
don’t we just like, I don’t know, invest in them to keep the competition? Especially…
and people are just overlooking the fact that it’s good to have two lower quality carriers
to compete with each other. That’s a good thing! That it’s okay because they sell their
products to different subsets of organizations. It’s not just about the customers. It’s about
the wholesale stuff. It’s about the Boost and the Cricket, so like, yes. Sprint might
have fewer people, but if you start to add up the effect that they have on the market
as a whole, it’s that good. Yep. Anything else you want to add here? No, I said… Yeah,
we don’t think DISH Mobile’s going to work. It’s almost certainly going to fail and get
bought out. Is that, yeah, that’s kind of my take — that’s gonna fail. Yeah. It’s
not gonna be good. We’ll see where our cell phone service bills are right now. Yeah, and
then in seven years. Yes, Dish mobile. So they’re going to create… they’re not going
to increase cell phone bills for three years. After that, all bets are off. So it’s like…
it’s ridiculous. It’s yeah… I’d like to build on a wireless network in seven years
that’s going to cover 70 percent of the U.S. population. Do it! It doesn’t make any sense,
as you have as good a shot as DISH right now. Yeah. Thanks for watching. Yeah, thanks for
watching this video. Give it a thumbs up. If you enjoyed, leave us a comment down below.
Let us know what your thoughts are on the new DISH Mobile. TBD — we’ll see how it
goes. Wish Mobile! And don’t forget to subscribe to this channel for more great videos about
cell phones.

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