Good day, welcome to the DISH Network Corporation Q1 2021 earnings conference call. Today's conference is being recorded, and at this time, I would like to turn the conference over to Tim Messner. Please go ahead, sir. All right. Good morning, everyone. Thanks for joining us. We are joined on the call this morning by Charlie Ergen, our Chairman, Erik Carlson, our CEO, Tom Cullen, our EVP of Corporate Development, Paul Orban, our CFO, and then on the wireless side, we have Stephen Bye, our Chief Commercial Officer, Marc Rouanne, our Chief Network Officer, and also John Swieringa, EVP and Group President of our Retail Wireless business. Before we start, I need to remind you all that the statements that we make during this call that aren't statements of historical fact constitute forward-looking statements. Those are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially from historical results and/or from our forecasts. We assume no responsibility for updating forward-looking statements. For more information, please refer to the risks, uncertainties, and other factors discussed in our SEC filings. We're not going to be making any opening remarks this morning, so operator, we'll go straight to questions. [Break] All right, folks. Sorry about the brief technical difficulties, but we are back, and we can go ahead and start with our Q&A session. If you are an analyst, please press star one to queue for a question. Again, that is star one to ask a question. I'll go ahead and pause for just one moment to allow everyone an opportunity to signal. Okay, we'll go ahead and start with our first analyst question from Ric Prentiss with Raymond James. Thanks. Good morning, guys. Two questions, if I could, on the 5G side of things. First, some of the other operators out there have suggested there could be some supply chain issues, possibly. I know you guys have a fairly unique network build. Can you talk a little bit about how you're seeing the supply chain? Any concerns in the rollout schedule? As you said, unfortunately, I have this, Charlie. We didn't have Dave Mayo of today, but the supply chain issues we are seeing, and Erik may speak to it. We're seeing those issues across the board, whether it be in our set-top boxes for our traditional DISH TV or handsets and semiconductors. We'll work through that, and in business, you always have obstacles, and this is just one more of them, and it's of course in the backdrop of the pandemic, which doesn't help things. We focus on what our task is at hand, and we adjust our management decisions with the conditions. I think as a result of the pandemic, shortages, and increased demand, I think you're going to see that for a while. Makes sense. Second question on the 5G side is, we think the enterprise wholesale side of the business could be actually fairly exciting, a significant opportunity. Help us understand what you're hearing from customers as far as what they need to see from you guys before they can make commitments or contracts? Is it Vegas up and working? Is it a nationwide network? What do the customers want to see from you before they start making commitments? Am I right that a wholesale enterprise could be significant? Yeah. I'm just Charlie. I'm going to hand it over to Stephen Bye, who kind of runs that side of our business for us. The context of it is that, first of all, I think as a general statement, it's a big business, and I think it would be good for all carriers because it's a very nascent business today. You can see that once you can get into the enterprise business and do it a little bit differently. It requires a different architecture to do it correctly. Maybe I'm going to turn it over to Marc real quick and just give you a little architectural tutorial on why what we're doing is different there, then maybe it goes to Stephen to talk about the business opportunity. The way to think of our cloud-native network is a network of networks. That's the way it's architected. When a customer comes to us, it's easy for us to offer one sub network, which we can call a private network. There are techniques behind that, like slicing, automation, like software defined. I'm not going to go into the techniques, natively, the way to think of it is really this network of networks. Right? Stephen, you're seeing that, you're playing this to the prospective customers, they're telling you how they would shape those subnets, right? Absolutely. No, I think we've talked to a number of customers across multiple verticals and different industry segments, and there's an increasing appetite and demand for the kind of network that we're building, which is really to enable them to have more security, more control, and also more visibility into the data that's coming off the devices so that they can control their business more effectively. We're seeing a terrific demand, and the network architecture that we're putting in place actually enables and unlocks that opportunity for those enterprise customers. It's, again, not restricted to any specific vertical. We're touching a lot of different companies and a lot of different vertical segments across the country. The other aspect of the opportunity that we see for ourselves is that, while we build out a nationwide network, we are in the process of working with customers and prospective customers on private networks that are not limited by the geography of our national footprint. We can deploy those within their environments to support their business operations as well. The demand we're seeing is terrific, and we're already engaged with a number of customers today. Don't they need nationwide to place some of these contracts and commitments for some of these opportunities? Exactly. Okay. Thanks, guys. Thank you. Once again, that is star one to ask a question. If you find your question has been answered, you may remove yourself from the queue by pressing star two. The next question is from David Barden with Bank of America. Please go ahead. Hey, guys. Thanks so much for taking the questions. I guess two. Charlie, you saw your stock price move on the AWS cloud partnership announcement. I was wondering if you could or would be willing to opine on what you think the significance of that relationship is. Is it just a business partnership, or is it the beginning of something bigger? I know we don't have Dave on, but Stephen, maybe on the Las Vegas build, could you talk to us about what that build looks like? What are you going to do? When is it going to happen? What are you trying to get out of that in terms of showing people what this network is capable of? Thank you. Okay. This is Charlie on AWS. Thanks for the question. As we've said for, gosh, as long as I've been doing conference calls, we view partnerships maybe a little bit differently than other people do. It's really, we want to work with committed companies that share our vision and that are helpful in making our company better. In return, we're going to make their company better. We start in any partnership, particularly when it comes to technology and building a network, you have to start with best-in-class technology. You would never compromise somebody else's multi-billion-dollar investment and take a secondary network. We've analyzed. I've been working on it for five years. Marc was a lot more expert than I was. Over the last 18 months, we've really been with all the cloud providers, big cloud providers. The good news is they're all very good, and the United States is very lucky. There's no question that the United States leads in cloud technology. At the end of the day, Amazon had too big a head start. They jumped in really early. They wanted to get into the telco space. It was strategic for them. The cloud infrastructure, as it existed a couple of years ago, really didn't handle telco very well. There's been a lot of R&D and investment that they've had to make to transform their network into something that where a telco can operate in the cloud, because it's a little bit different than their traditional IT infrastructure. At the end of the day, they were best in class for what we needed, whether it be their APIs and the documentation and discipline and the community that supports them and the developers, and then, of course, obviously, the reach into the enterprise business. That's the first and foremost. Then the second thing I think is: Is the company committed? I'm not going to put words in Amazon's mouth. I'll let them talk to their commitment. They've done a lot of work for us to help us without knowing whether they'd have a deal or not, and we're very appreciative of that. I think it's helpful that Andy will become the CEO because he's owned this project from the start, and he'll be able to move all the pieces within Amazon to focus on this. I think at the end of the day, I think we're going to be their largest customer in cloud, and I think they may be the largest customer in our network. We have to build the network to prove it, and they have to build it and prove it. I think that other carriers around the world, including the U.S., will look at Amazon as a real leader here because we're just doing something different. I say this, the simplest example, you've got to look at it, we're building Netflix in a Blockbuster world. All Netflix did was put the video in the cloud. That's all they did. Once you go into a physical store, you put it in the cloud. Right. All the business plans in the world, all the numbers, all the talk, they just did something simple. They put it in the cloud. They were a little ahead of the technology. The technology got there. All we're doing is taking all those towers that you see as you drive down the highway, and we're basically putting them in the cloud. Instead of driving to a physical store and renting a movie, you're going to get all your data and information and automation and everything from the cloud. It's a dramatic paradigm shift in the way a network is built, and it's an advantage over legacy carriers who have 30-year-old architecture. They'll slowly get things in the cloud. They'll put pieces of their network in the cloud, but they just can't take a front loader and move everything to the cloud at one time. With that, I'll turn it over to you- Just in terms of what the Las Vegas build looks like, I think there are several attributes that are really important to what we're doing, to build on Charlie's comment. One is that we are building a cloud-native infrastructure. We are using an open radio access architecture, but it's also a 5G native network. We're not trying to put 5G on top of 2G, 3G, and 4G. The infrastructure that we're deploying is optimized for 5G, and the way we've designed the network from an RF perspective and a deployment perspective is to take advantage of the 5G architecture as well as the 5G platform. What does that look like? It's basically a new network. It's a new infrastructure. It's designed using all the spectrum bands that we have, and the RF is optimized to take advantage of that. We're on a path to launching that in the third quarter, but it's one of a number of markets we have coming on. We just haven't announced those markets through the end of the year. It's the first of, obviously, a number that we have in flight today, and we've got activity going on across the country to actually build out this network. It'll be the first one that people can touch and feel and get the experience. It is really a 5G native network. We've proven that O-RAN from a technology perspective can work. We converted that at the end of last year. Now we're in the execution phase. Now we're in the deployment phase. Vegas will happen to be the first one that it will be a fully deployed market that people will be able to touch and feel and experience. If I could just quick follow up on that, just real quick. Is this experience, is this going to be a business enterprise experience or a consumer mobile experience? It'll be done in phases, but the network is designed to support all customers across all segments. Appreciate it. Thanks, guys. Appreciate it. Thank you. The next question we've got is from John Hodulik with UBS. Please go ahead, John. Yeah, thank you. Maybe, Charlie, just could you expand on the comment you just made that Amazon could potentially be your largest customer, or talk about sort of the go-to-market plan that may involve for you to sell services into the AWS customer base? Back with the AWS deal, obviously, it's got to help in terms of sort of time to market, CapEx. Your overall sort of total cost of service versus the incumbents. I mean, did the original plans that you laid out for all these issues, can you build upon those benefits that you're seeing? Or was that all contemplated, that you would strike a deal like this with AWS going forward? Thanks. Your comments were correct. AWS does help us with time to market. They do help us with CapEx, a lot of material with CapEx. Some of that does go to OpEx. Our OpEx, with automation, is still going to be materially lower than it otherwise would have been. They help with expertise. They have fabulous engineers who invented the cloud, and they're now helping us invent the telco cloud. All that's good. Yes, we anticipated a cloud-native network from the beginning. The $10 billion total build-out cost that we announced a couple of years ago, I think people are probably still skeptical. Some people are still skeptical, but you can see where we're headed, that most of your models will probably take several to a lot of CapEx off the board when you understand the architecture, and we're not going to go through all the architecture in this call. But it certainly has a material impact on CapEx. Hey, John, this is Tom. I'd just say, obviously, they've made massive investments over the years in compute, storage, transport, and edge. We'll be sitting on top of that. As we tightly integrate telco into their infra, then we can expose APIs to their development community, which we think enables third-party products and services to have network connectivity as well as enterprise applications. Yeah. You can see how, if we were one of the three big incumbents where you have scale, what we're doing might not make as much sense. Realize we're starting with a very low customer base of 9 million, on a variable cost, it just makes more sense. Having said that, from that, we still would do it because the technology of what we're doing, with the fact that you have your data stored and you can now analyze it, and the fact that you can automate and use machine learning and artificial intelligence, and the fact that you can slice the network. A few people are writing about that now. A few people understand that. You're starting to see a bit more visibility into why that makes sense. We've been a few years ahead of the curve. O-RAN was pie in the sky a couple of years ago. We'll prove that it works in Las Vegas. Cloud-native architecture may have been pie in the sky a couple of years ago. We're going to prove that it works, and the rest of the world will follow. You're seeing that. You're seeing O-RAN now being adopted around the world, and the regulators understand it now, where they didn't have a great understanding a couple of years ago. I think from an architectural point of view, and Marc really is the architect here, I don't know, but you've spent a lot of time on it, and you've talked to a lot of people. I don't know if you'd change anything today. No, absolutely. The more we play with it, the more we're impressed. Of course, we have onboarded a software, all the telco software on the cloud, and it's fascinating how fast it is, how we can make changes, how we can scale it. Just scaling it. In the telco network, everything is frozen, and you plan your investment 18 years ahead. We scale. We scale up and down during the day, during the night. We need a new platform to test a new private use case. We just scale it. It's quite fascinating for engineers to see what we can do now. I'll just repeat my opening comments last time, which is, we're technically now confident that we can do technically what we've talked about for the last several years. We do have execution risk, and I'm sure that things won't go smoothly, whether it be COVID, supply chain, or the actual execution of taking things from the laboratory and then deploying them in Las Vegas and multiple cities over the next few months. Some stuff's not going to work. Having been through this kind of scale before, and we just have to fix it, and then we find out whether that strategy of picking the vendors who are committed to what we're doing did we pick the right team from a vendor community, and do we have the right team internally to overcome the obstacles that we inevitably will face? We're all confident today, then as soon as we light up Las Vegas, we're probably going to be less confident the next day. That's the way my experience is. Then we'll dig in and fix the problems, and we'll be patting ourselves on the back, hopefully. It's execution risk, so to you guys as investors, that's a serious risk. We've eliminated what I always thought was by far the more serious risk, probably 10 x more risky, was could you architect a network? Could you enter the marketplace when there was a paradigm shift so that your technology one-upped not only the incumbents in the United States, but we're one-upping what other people around the world are doing, particularly in China. We'll see. Thanks, Charlie. Okay, thank you very much. We will take the next question from Philip Cusick with JPMorgan. Please go ahead. Hi, guys. Thanks. I wonder a couple of things. First, can you talk about the commitment of Amazon and AWS to building the edge of their data center network out to host your applications? How close to your radio layer do those AWS-hosted locations need to be? A separate topic, I wonder if you can expand on the T-Mobile relationship. What's the ideal outcome from this CDMA network dispute? Can T-Mobile help you transition customers, or is it really too late with only eight months before they plan to turn off CDMA for that, and you really just need them to delay? Thanks. Let me take the one on the architecture. Everything north of the base station, the site, is in the cloud, right? We have different options for the edge, so for the sites, but also for the private edge, where the first option is to use Outposts, so with different form factors. What is Outposts? It's a small rack that is onboarding all the cloud with itself, so you can move that small cloud where you want, all the way to your factory site or wherever. We have that option with AWS, so we can put our software all the way to the edge. The other option is that we're building together a next-generation RAN acceleration, what we call a DU, which is the compute part of the O-RAN. We're building that next generation, then, which is CloudScale and Scout, which will allow us to mix and use that technology in the RAN as well. The first part of our deployment, as you know, is on FlexRAN with Intel, but we have also announced we're working with partners. We announced Qualcomm, now AWS on generation two, because speeds are going up. We are introducing Massive MIMO. We are accelerating CBRS and a lot of other technologies, and that's what we are doing with AWS. What was the second part? The CDMA. Marc, do we need to have? Go ahead. Do we need to have more Outposts construction? Do we need to have a lot more Outposts construction by Amazon? Is that a substantial capital commitment for them? We have plans with them. Currently, today, we've designed the network with the latency we require, which is, I'm not going to give a number, but it's way better than what you see in the current networks. We have enough local zone situations, the availability zones, to create a differentiated latency network. As the demand increases for extremely fast machine-to-machine, we are need to build, and with AWS, we are going to build deeper and deeper into the network when the demand is coming up. We have plans with them on that. I think the key there is, Philip, that's designed into the architecture, so we don't have to bolt it on. Look, every time you're bolting something on, you get heavier and heavier. You don't have the right foundation. Eventually, you just get so much cost to bolt stuff on and try to make it work, and so I believe that the edge is going to the phone in your hand, so it's going farther than even most people think about it. It ultimately will be the phone in your hand, but we're architected to go all the way from the phone in the hand to the core and everything in between without having to bolt stuff on. If that helps. Well, CDMA, it's disappointing. I very rarely get into the politics of this kind of stuff, but the CDMA issue is real. You saw our disclosure. I was extremely disappointed. I've always had a high respect for the management at T-Mobile, and particularly their CEO. I was disappointed when he went on TV and really said a couple of untrue things. One was that it was no big deal that he was turning the CDMA network off. 10% of people didn't have phones, only 900,000 people, no big deal. First of all, that number is way low, as you've seen in our disclosure. I'm not sure exactly. I don't think he's looking at our books. Maybe he is, but I don't think he's looking at books, so I don't know how he knew the number. The second thing he said, which was even more shocking, was that he had to do it because the FCC was requiring it and demanding it. I don't know the exact words, but that was the gist of it. This is the same company that goes on Twitter and talks about dumb and dumber and how they're for everybody, they love everybody, and they're for the consumer. They went to the California Public Utilities Commission under oath and said it'd be three years before they turned CDMA off. They forgot about that. Once they got their merger done, they look like every other big company. You, as shareholders, should be pretty happy because they're certainly giving a good return. They've gone from synergy of $43 billion to now talking about $70 billion of synergy from the and they're going to go and turn off millions of customers, particularly low-income customers. To me, that's a hard loss, and that's just not the T-Mobile that I've seen before, and they've become the Grinch, right? We've seen this story before, right? The Grinch went and stole all the kids' toys, right? They're stealing everybody's phone out of their hands. It doesn't work anymore. It was because the Grinch's heart was too small. He had a tiny heart. The uncarrier has become the uncaring carrier, and that's a shame. The positive is that the Grinch, at the end, decided to give the toys back, and his heart grew three times its siz e. I'm hopeful that T-Mobile will. Nobody will work harder than this company to try to make that transition smooth. To answer your question, it'll take more time. If they were to give us several million phones today that we could use, we still couldn't do it in the next e ight months, because we don't always have the emails. The customers don't always have emails. They don't have addresses. They work transiently. They don't always come into our stores. It's a much more difficult process. Verizon recognized that. They've extended their 3G shutdown and CDMA shutdown. I hope that T-Mobile will reconsider that; if not, it'll have a material impact on our customers and certainly on our financials. Charlie, that might be the hardest I've laughed on a conference call in 20 years, thinking about Mike as the Grinch on top of Mount Crumpit. Thank you. No, that heart is so small. It's funny because I just happened to read that story to my granddaughter, and every time I kept seeing the Grinch, instead of being green, I kept seeing him in magenta. I kept seeing the magenta Grinch. It's just serendipitous, I guess you learn a lot from reading to your grandkids. Thanks. Thank you for the question. The next question we will take is from Michael Rollins with Citi. Please go ahead. Thanks, and good morning. First, just following on your supply chain comment, is there a mechanism for you to ask the FCC and DOJ for an extension of your build-out requirement? Do you plan to submit a request for that? Just secondly, taking a step back on the retail wireless strategy, can you share with us how the postpaid and prepaid retail strategy is going to evolve over the next 12 months? I noticed in the 10-Q that you described after acquiring Ting, that you're offering that nationally, and I was just wondering if that satisfies that component of your regulatory obligation to be a postpaid service provider. Thanks. Yeah. I'll let John talk about the Ting acquisition and our postpaid plans. As far as the supply chain, obviously, the FCC agreement we have recognizes that there's supply chain issues outside of our control, that the timelines could be adjusted. We don't look at it that way internally. There's always unforeseen circumstances. This one might be particularly acute, but we're not going to let anything stop us. We're focused on meeting our timelines, and regardless of what the challenges are, that's our focus. We'll have to reevaluate that from time to time, but we're focused right now on Las Vegas, and we're focused on a 20% build-out by June of next year. John? This is John. Thanks for the question. Certainly, you've seen us acquire now three MVNOs in the past three quarters. Certainly started with Boost. We're working to improve the profitability of that business. We did acquire Ting and have since relaunched it as a nationwide postpaid service. Starting to see some traction there. We certainly do expect to close on Republic Wireless here this quarter. Generally, we're looking to expand our reach, expand our distribution, and look for new segments to serve, compared to where we started with Boost. Look, I think we'll really start hitting the gas when we have access to our own network and the best products and services. Just to follow up on some things Charlie said earlier, the handset market is a big factor for us right now. We're certainly making some progress, but we could potentially do more as the supply chain situation starts to open up a bit. Yeah, and I would say- And does that- Not to belittle the CDMA point of view, but talk about a tiny heart. You've got LG, which has shut down production, which was our biggest vendor for phones for our customers, and you've got a pandemic, and you've got a supply shortage of chips. Right? That's the time that you decide that you got to make $70 billion of synergy instead of maybe $69.8. I doubt you guys would sell the stock if they only made $69.8 billion of synergy. Right? That's particularly disappointing. Does this Ting national launch, does that qualify for the regulatory part? Which I think is a year anniversary, I believe, after you closed the transaction with Boost. Is that right? The answer is yes, it would qualify. Yeah. Satisfies the final judgment as is, we believe that as we add Republic and other growth into the market, it will further reinforce that. I think you're being a little too anal on the thing. We've got FCC obligations, but what we're really doing is building a world-class network that takes telecom to the next level. It really is an IT network that looks like a telecom network. It's really the same thing that happened in the IT world 20 years ago. We work with the FCC to explain what we're doing, why this is important, and the FCC is always going to make decisions in the public interest, and from time to time, they may want us to go in a stronger direction or another. We're always listening to their advice on how we can help consumers because we are a regulated body and a company in that sense. I get it that for retail, but we're going to be in retail postpaid in a much, much bigger way. For us to make a bigger impact, we have to have our own network. We have to have the economics, and we have to have a unique network that we can do things differently than other guys can. That's where we can make the biggest impact. That's where you'll see it. Thank you. The next question is from Doug Mitchelson with Credit Suisse. Thanks so much. I love the Blockbuster analogy that you actually honed in on at one point, Charlie Ergen. Oh, you did. You're talking to the guy who cost their shareholders $100 million. In life, one thing about management is you make a mistake, you try not to make that mistake again, and I don't think you'll ever see us go onto last year's technology ever again. A few quick ones for Marc. I think you answered this with regards to Phil's question, but I still wanted to ask it directly with very Massive MIMO and O-RAN because there was some controversy over the last sort of couple of months, with the radio masts through beamforming and other things I don't fully comprehend, moving from the radio to a distributed unit with Open RAN. What you were saying basically is you're highly confident that O-RAN on your architected network will have sort of no issues with Massive MIMO. That's one. I think second, Charlie, we look at the available financing and gauge the potential pricing for the upcoming three, four, and five spectrum auctions. What's your level of interest in expanding beyond the 140 megahertz or so, given the confidence you're showing now in technology at this point? Do you think about future potential market shares versus the spectrum that the other folks have post- C-band? Lastly, I don't know if Jason's on, but any thoughts on managing the June 2021s that are coming due, whether those are going to be sort of rolled forward or paid off with cash? Thanks so much. Paul's going to answer the June question. Yeah. We're going to be opportunistic in the marketplace, and we clearly have enough cash on hand to redeem both this year's maturity as well as next year's. Was there a Marc question? I forgot. Marc first. Yeah, you said it right. On the Massive MIMO, I just want to say a couple of things about O-RAN. We have seen an extraordinary investment, especially in the U.S. ecosystem on silicon. In the radio domain, everybody has been dreaming of that for the last 20 years. Silicon has been the weakest point, and what we see now, wow. It's all over the place. O-RAN has driven that. You can think of it, of all the IT and silicon industry, all the U.S. and abroad investing now to serve that market. I've never seen that. What we have in our hands for today, but also for Massive MIMO, is just incredible. We're going to leverage that. I'm making the bet that the existing vendors are going to use the same silicon that was brought to the market by the O-RAN, because they just don't have the same in-house. That's forcing them to come to the market as well. For Massive MIMO, now, there is a debate about Massive MIMO, and people are confused about O-RAN. One of the debates is that you need to pair the compute with the radio in order to manage the beamforming, and we agree with that. O-RAN allows you to do that as well, right? O-RAN allows you to pair the compute, the software, and the radio in order to have advanced beamforming. O-RAN can do exactly the same, if not better. On the spectrum, 100 megahertz probably was table stakes up until the T-Mobile Sprint merger and the last auction. Obviously, we've been in every auction except the first two and one satellite auction that nobody else has been in besides a couple of companies. We always look at that, but we have advantages in our architecture. We have enough spectrum to grow, and we'll go from there, and we'll see what happens. There are spectrum caps and spectrum limits. I would think that the regulators would look to make sure somebody doesn't capture too much. It's maybe gotten a little bit sideways, but we'll see. All right. Thank you, everyone. Thank you. The next question is from Jonathan Chaplin with New Street. Thanks. I've got a couple of quick ones. First, John, you mentioned that the AWS deal materially helps you with CapEx. The guidance was still $10 billion. Does that mean that the sort of the scope of the network, now that you've locked in this Amazon deal, is bigger than you initially anticipated? You mentioned that Verizon is keeping its CDMA network around for a while. Is there any way to transition CDMA subs off of the Sprint network onto the Verizon network? I presume that they'd be happy to have the extra traffic if they've got a fixed cost there. Doug, you bailed on the C-band auction pretty early in the process. What does that say about your sort of appetite for the 3 gigahertz band generally? Are you likely to be a big player in the 3.45 gigahertz auction? Thanks. On the auction question, look, I feel confident that we have a fairly good feel of what the value of the spectrum was. We just thought in that particular auction, because of the structure of the auction and the dynamics of the auction, that it went far beyond what a reasonable company would bid, and I think that was a level that didn't make sense for our company. Obviously, if you had hundreds of millions of customers and you were telling everybody that millimeter wave was the future, and maybe that technically was a bit of a problem, you had a different strategy. In regards to the price, I think they'll be fine. I think that long- term, they're going to do just fine. They're going to be very happy that they have that spectrum. It doesn't set up very well with the consumer. The $90 billion has to be paid by the consumer, unless the government's going to give the money back. It makes it a less competitive industry out there. I think it's maybe even more important for DISH to be successful. I think with AWS and cloud in general, we started. Marc had been looking at it for a long time. You may or may not know, but Marc used to be in one of the big OEM providers. He's always been frustrated by the pace and the technology, and that's one reason he came to work with us at DISH, because he could start with a clean sheet of paper, and it was his dream to do that. It was in his head how to do that. He knew a lot better than we did the issues with legacy. I think that at least in the meetings that I've been in and stuff, we always had high hopes for cloud, and we knew it would get there. I do think the scale, the investment, and the vision of Amazon is maybe a bit larger than. I mean, you might want to speak to it, maybe because you had been working with them before, so. If we were to start a network by ourselves, we would build one data center and a second data center for redundancy. Here, we're just expanding across the footprint. In terms of what we can do, implementing different regions in different availability zones, this is something we could never have built. Nobody could have built on day one. It would have taken 10 years to do. Same on the transport, on the redundancy, on the size of the compute. The same on the elasticity of the network. One of the things about the telco that is really slowing down telco is that they are over-optimized. They never have more capacity than they need. We have unlimited capacity. For us, it's a luxury because we can put additional software, we can put automation, we can put things that no telco would dream of because all their hardware is tight. They run it at 70%-80%. We scale it down, up during the day, during the night. It's a different scale. Yeah, it cannot be compared. Yeah. Over to you, Dave. On the question around Verizon and CDMA, it's really not a viable option because you have to look at the bands and the devices where our customer base sits today, and the fact that it would be potentially even more disruptive to try and do that transition. We're very focused on the customer experience, even as we go through those transitions with T-Mobile today, and that would just add one more variable and actually one more complexity in that step. While in theory it might be an interesting concept, it's just not practically or operationally viable. Not to mention, it's not plausible from a timing standpoint. Well, you'd only be doing it for a year. Yeah. You do it and try it again. Got it. Thanks. Thanks, guys. Okay. Thank you so much. We'll take the next question. The next question is going to be from Kannan Venkateshwar with Barclays. I apologize for butchering your name, but go ahead. Don't worry, I butcher it myself sometimes. It's all good. Charlie, a couple of questions. First on the DBS side, the DirecTV deal with private equity, I mean, it probably opens up another avenue for you to look towards monetizing that asset. You've been running this business for cash, and margins have expanded like we saw with the results today. Could you just talk about if the AT&T plan makes it a bit easier for you to somehow look at divesting this deal, regulatory issues aside? On the capital side, the AWS deal should help you with CapEx, and like you said, I guess, it increases your OpEx needs. When you think about the overall capital needs, I guess it's also a function of the cash burn as you scale the business in the first few years. The $10 billion probably does not capture that. Could you give us a sense for what your total capital needs would be if you include the cost of scaling the business and the initial years of cash burn? Thanks. Yeah. We're not sharing that modeling today, but I'd say a couple of things. One is the $10 billion for build- out, which doesn't all happen in the next two years. We don't spend that entire $10 billion to meet our FCC obligations. You'll see it as we ramp up, you'll see the ramp rate we get to, and you'll be able to model that out. We're just giving the overall objective of where we're going. All that $10 billion isn't spent by June of 2023, which is our major milestone. It does take us through the complete build- out for the FCC. The other part of the question, which I didn't write down, was. DirecTV DirecTV. I'd just say the same thing, Raj. I think it's inevitable that those two companies will go together. It'd be harder and harder for regulators and people to make a case when, gosh, there's got to be 10 or 15, 20 competitors now, all with 50, 100 million subscribers. I think DISH and DirecTV are probably not even in the top 10 video companies today. You run the risk that prematurely rural America and other people don't have a choice. Our vendors are competing with us in linear TV, so that's an unhealthy place. I think that's inevitable, but certainly that will be something that gets scrutinized if it ever comes to pass. That's an AT&T question. You'd have to ask them whether they have an interest in that, and now a TPG question. Can I ask just one quick follow-up on the AWS issue? Was there ever a discussion around Amazon putting capital into DISH as a part of this whole negotiation? Man, we've talked about that for five years, and I just think that, I said this the last time, I made the mistake of doing a 0% convertible, wihich is essentially I sold shares at a little bit less than $41 a share. I thought we'd get better execution on that. They're so committed to telecom cloud, they want to be a vendor for everybody, so you should ask them. They're not picking sides here. I think they want to be a vendor for everybody in the world, and they've got a leg up to learn from us, and so forth. We think we're building the world's best network, and we think that's pretty valuable, and we think that that's a lot more valuable than where the market has us today. We've been building value for the last five years every day. It's just not showing up. As analysts that are on the call, you guys, I used to be a financial analyst. You want numbers, you want to put in a model that spits out a net present value kind of thing, and you can value a company. We're not quite there yet, that we don't quite fit that mold. We're a bit conceptual of how we're one of four wireless players. Nobody can be connected without one of the four of us in a nationwide way. The wireless business is going to be a bigger, more profitable business for everybody that's in this business, including the three incumbents, because everybody has to be connected. Facebook made almost $10 billion this quarter, and I think 90% of it was from your phone, data on your phone. I don't know. I'm not that smart. I'm from Tennessee, and I can't figure it out. I just know that not one Fortune 500 company can make money without being wirelessly connected. Not one of the big infrastructure companies relies on it. It's a necessity, and the technology is changing to provide more robust service for all the incumbents and us, and opens up a lot of value-added service for the incumbents and for us. We think we'll get our fair share of that. When you start seeing that, you'll be able to put that into a model. We're probably that first FCC milestone before everybody would be comfortable with the numbers to put in that model. I think we're still a bit conceptual for another year. Thank you. Operator? We may have time for one more question if somebody's got one. Yes, sir. The next question will be from Rich Greenfield with LightShed. Thanks for taking the question. Two questions, Charlie, one for Walt, who couldn't make it today. In five or 10 years, his question was, what will be generating more EBITDA for DISH, traditional consumer wireless or new 5G applications? What role would Amazon play in actually selling the latter? I've got a follow-up on the media side. Rich, hey, I saw you guys are doing great. Great quarter for you guys. I think 5G applications will be the mos t valuable part of our business. Only because that's where Marc likes to tinker, and he kind of runs the show when it comes to that kind of stuff. Amazon, look, it's a question you'd have to ask them, but I look at it from a big picture point of view. They are a business that does cloud, but it doesn't do the last mile. It doesn't wirelessly connect, but they have a huge base of customers that need to be able to connect to campus, connect to the factory, or connect to the last mile, or connect to their customers in a secure way. You've seen some of our white papers on security about how what we're doing is more secure, we believe, than incumbents. They have a retail business, you need to be connected to order, but that retail business also needs to deliver things to you. They deliver by plane and by truck. Those move, they need to be connected. They're going to deliver by drones, needs to be connected. They have devices in your home. They want to connect to your home, whether it be a camera, a doorbell, or Alexa. All those things need to be connected. They'd like to make those products better and safer. If you're connected and you can do that on your own private network, they can make their products better and maybe get a leg up on their competitors. All of their businesses. They're video companies. Last I looked, video, you need the connection to get it. Whether that means storing it overnight, on a phone, watching a TV, or watching on a tablet or watching on an Alexa device. All those things, and they're making a move into healthcare. If you have the future of healthcare, it is people being connected so that we can be monitored without having to go to the emergency room, save costs, and get better outcomes for patients. I don't know. Again, I'm fortunate that I'm not smart enough to figure out all the stuff that you guys figure out. I'm not smart enough to write a report. I'm not smart enough, and I can't even speak English. All I know is I can see trends, I can see where things are going, and I can see what people do. I observe what people do, and you just observe it, and you just say, "Let's go where things are going, and let's invent things that people don't even know they need, and let's make it a great product." All right. Rich, you had an immediate follow-up, and then the operator will go to the press after that. Good. Rich. Speaking of where the puck is going, all of the media companies have now just redid their NFL deals. They're all talking about the fact that they're now going to simulcast all their NFL games, essentially, on streaming services that don't require DISH or Comcast or DirecTV or any of you, as they're really putting now even some of their most iconic content out of the bundle. Yet affiliate fees keep going up, and retrans keeps going up. I guess what changes this? Is someone going to draw a line in the sand, Charlie, and just say, "This doesn't make sense. Affiliate fees should be down 30%, not up 5%."? Affiliate fees should probably be down over 50%. What makes that happen? Who's going to make that happen? I don't know. I think it's unfortunate. I'm very empathetic for broadcasters, particularly local broadcasters. A lot of them started as small businesses and grew their businesses. They're not only having to deal with legacy linear TV, but they're having to compete against their big owners, and I think they've got to come up with strategic solutions to reinvent themselves, and we'd like to work with them to do that. Retrans is peaked. We were the first guys that say to regional sports, we said regional sports have peaked, and two or three years later, people figured that out. Retrans is peaked. You've already said it, I've said it, that the retrans is basically an NFL season ticket subscription. Right. How did the Country Awards do this year? That used to be must-see TV. It's just changed. All right, operator, let's go to the press now. What'd you say, Rich? I was just saying retrans peaking is an important statement. I think it's captain obvious, but we'll see. Thanks, Charlie. Thanks, Tom. All right, operator, we'll go to the press now. Okay. We will now take questions from members of the media. Again, if you are a member of the media and would like to ask a question, please press star one now to enter the queue to ask your question. Our first media question comes from Scott Moritz with Bloomberg. Please go ahead. Great, thanks. Charlie, if you would, go back with me to the trial, when the state attorney generals wanted to block the T-Mobile-Sprint deal. You were called as a witness, and you had to describe your business to the judge. Was this Amazon cloud partnership part of that discussion? Amazon specifically was not. I wouldn't get into testimony. Obviously, the technology and the paradigm shift in what we were doing was, and to the judge's credit, which I think there's probably people on this call that can't understand what Marc or I are saying, but I think he understood that the world was going to go to a different place. As you know, Scott, it was a closed proceeding. Got it. Thanks. Thank you. Our next question will be from Andrew FitzGerald with WSJ. Please go ahead. Hi, Charlie. Two questions, if I could. First of all, this partnership with AWS will affect CapEx. Could you describe whether it is necessary? Is it dependent on AWS building more infrastructure closer to the edge, closer even to the tower? Do you have any idea if that's a commitment on what kind of timeframe AWS would be working on? Just a second, I didn't see it in the filing. Sorry if I missed it. What is the company's headcount today, and where do you see hiring going over the next year? I think Marc answered the first part of that question, but maybe you can summarize for Andy. We have designed a network with AWS, and the data centers they have today, what they call the availability zone and local zone, together with the transport they have, is sufficient for the first phase of our services and the latency that we have defined with C-band. That latency is already much better than what can be done today with the 4G plus, 5G minus networks that we see in the U.S. When, over time, we expect the demand to be for very specific applications, and some customers to ask us for specific latency. In that case, we can push down the Outposts or other sites with Amazon. We've discussed that; we have a path forward for that when needed. In terms of headcount, I don't know if we've disclosed that, but we certainly have thousands of people working on the build. The biggest hiring has probably been in deployment over the last six to nine months, private deployment. The other thing that you don't have visibility into is our vendors. We got over 10,000 people, probably between all our vendors, working on what we're doing. There's a tight community that wants to see this happen, and look, we're happy to be working with the people, some big companies, some small companies. It's fun because we all want to see it happen, we all want to make it happen, and everybody is convinced we can do it. We'll see how good we are when we start working through the problems. Operator, I understand there's one more press in the queue, so we'll go to that and then close up. All right. Thank you. We'll take the next question from Mike Dano with Light Reading. Yeah. Hi. Thanks so much for taking my question. I appreciate it. Two quick questions. One is, can you talk about your plans for the CBRS spectrum licenses that you have? My understanding is that the radios may not support that spectrum band, and so I'm wondering if it's going to be deployed at a later date or what the plan is there. The second, totally separate question is, you've talked about having silicon from Qualcomm and Intel, and now, I guess, with the Amazon Graviton silicon. Are you planning to deploy equipment using that, so all of those different kinds of silicon, or are you going to pick one and stick with that? Or how does that work? Yeah. I'll touch on the CBRS to start with and then hand it to Marc. In terms of CBRS, the radios that we're currently deploying for our macro build, and for example, for Las Vegas and the other markets that we have underway, those radios don't include CBRS. We are working on another generation of radios that will incorporate CBRS as we go forward. What's important there is that a lot of the traditional radios today for CBRS have really been LTE and 4G radios or Band 48, and we're actually moving towards n48, and so being sort of 5G native. We need to see the next generation of radio development happen. The other thing that you've probably seen is that we have filed to look at different power levels, and increasing the category on the power level on CBRS as well. That would give us far more flexibility and a much more efficient build using that spectrum. We're working through that, and that will have an impact in terms of the supply chain. With that, I'll just hand it over to Marc. The silicon. Today, we are deploying 4T4R network with 100 megahertz, so we are happy with our FlexRAN architecture. It's powerful enough. We're using Ice Lake. We can include all the processing. We have good acceleration cards. When we go to Massive MIMO, when we go to CBRS, when we go to other bands, we expect to need more acceleration and more integrated silicon, and that's our second generation. That's when we will make the choice for additional silicon. You were asking about Qualcomm and Graviton, and on top of FlexRAN. You have to think about the diversity we're going to use for small cells, for example, or indoor, distributed indoor. I'm pretty sure that the type of silicon we're going to use will be different. For certain very high -density Massive MIMO, I'm pretty sure that we will have integrated DU and RU with different types of massive accelerators. I think we will tend to have one silicon per use case. When we diversify the use cases, I see different requirements. We're working very hard with the software vendors to put an abstraction layer on top of the silicon so that we can pretty much port our software on top without many changes between the different blocks of silicon. Great. Thank you. All right. Thank you all. Operator, that'll complete the call. Thank you. This concludes today's conference call. You may now disconnect.