Dish places offering for $2B, but will it be enough to fund the 5G network?

A week ago, Dish Network announced that it planned to offer about $2 billion of its senior secured notes. And on November 7, it placed the offering, which will close on November 15. The notes will pay 11.75% interest and mature on November 15, 2027.

Dish said the net proceeds of the offering are intended to be used for general corporate purposes, including the buildout of wireless infrastructure. The company said the notes will be secured “by certain assets of certain Dish Network subsidiaries.” But the analysts at Raymond James called the offering “spectrum securitized notes.”

Dish is scrambling to build its new 5G wireless network. It met its deadline to reach 20% of the U.S. population by June, and now it’s working to meet its next deadline of 70% of the population by June 2023.

The company ended the third quarter having completed construction on 10,000 sites, capable of providing coverage to 35% of the U.S. population. 

Analysts at both Raymond James and New Street Research are estimating that Dish will need to build a total of 33,000 to 35,000 sites.

Dish has always maintained that it will spend about $10 billion for its 5G network buildout, and it has not boosted that projected amount.

According to New Street’s analysis, at a cost of $200,000 per site, the 10,000 towers Dish has already built cost the company $2 billion. To build the remaining 25,000 sites at $200,000 per site, the company will need to spend a further $5 billion in capex.

The $2 billion it will raise from this month’s funding will help, but Dish will still need an additional $3 billion.

“The $2 billion Dish is raising now should give them capital for an additional 10k sites, taking them to 20k sites in total,” wrote New Street. “This will take them comfortably passed two deployment targets in June 2023: 70% of national POPs and 15k cell sites.”

New Street estimates Dish will need to raise more debt by the end of 2023.

In the meantime, the company is pushing forward with its 5G deployments.

Dish Executive Vice President for Network Deployment Dave Mayo has been posting updates on LinkedIn the past few weeks from various markets where the company is deploying infrastructure, including markets in Florida and New England.