On April 21, 2021, DISH, the fourth wireless operator in the US market, and hyperscaler Amazon Web Services (AWS) announced plans to work together, whereby DISH will leverage AWS infrastructure and services to build a cloud-based 5G Open Radio Access Network. The DISH/AWS announcement is important because this is the first 5G Radio/hyperscaler deal – or second if you count Rakuten as a hyperscaler. We are encouraged by the DISH/AWS deal and think this represents a big step in the industry. What’s so important is that two of the three major Radio Access Network (RAN) functions will be running on AWS; these are the Centralized Unit (CU) and the Distributed Unit (DU). We see the DU running on the AWS service called Outposts as being the most critical part of this announcement, because historically this hardware has been delivered as a proprietary hardware system using proprietary semiconductors from the likes of vendors like Ericsson, Nokia and Huawei. Thus, AWS’ involvement in the DISH network serves as a reminder of the opportunity for RAN vendors to deploy cloud native RAN in future cellular network deployments. DISH is employing a terminology it called a “Capital Light” model, whereby it reduced the amount of capital spending it requires to build out its planned national network. Key to achieving this light capital model is leveraging the capital spending done by AWS and instead leveraging what some might call an OPEX oriented model. DISH plans to launch live cellular services in Las Vegas, NV first, and then its 5G network will cover 20% of the US population by June 2022 and then 70% by June 2023 and 75% of by June 2025, and thereafter it will continue its build to “match competitors beyond 2025.” The company also plans to begin building enterprise focused 5G networks beginning in 2021. In our follow-up inquiries to the AWS and DISH teams, we have learned that DISH is exercising an option to run O-RAN using AWS Graviton hardware plus Enterprise Kubernetes Services. Additionally, DISH has the option to use Intel based COTS based hardware in parts of its network. Thus, DISH has flexibility to deploy baseband systems on AWS or in its network, and can use Graviton or Intel systems. We have seen AWS engage in contracts with other parties where there are minimum usage rates or dollar commitments. We are not sure this is the case for the DISH deal, but AWS explains that it expects to deliver “thousands of site specific hardware,” while at the same time DISH expects that by mid 2023, it will have built out “15,000 cellular sites.” We wanted to share some insights on how this relationship appears to be structured. It appears that many scenarios have been envisioned as to how the relationship may evolve in the future, and we think that both parties have worked in contract terms that allow some flexibility in achieving each company’s goals. We did not review the contract between the two companies, but in a webinar presentation held April 30, 2021, executives from DISH hedged their bets somewhat on the relationship with AWS in ways we found interesting:
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CHRIS DePUY
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