Dish stock jumps after announcing Amazon cloud deal for 5G buildout

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AMZNDISHCharles Ergen, chairman and co-founder of Dish Network CorpJonathan Alcorn | Bloomberg | Getty Images

Shares of Dish Network rose as much as 12% on Wednesday, reaching prices not seen since mid-2019, after the satellite TV company announced a partnership with Amazon Web Services to deploy a 5G network on the cloud provider’s infrastructure.

Dish is attempting to become the fourth national wireless player, behind T-Mobile, Verizon and AT&T, in addition to distributing video. The deal with Amazon is an essential piece of Dish’s plan to develop a network from scratch that can more efficiently deliver more reliable 5G speeds than its legacy competition. It’s also key for Dish to begin offering service by the middle of 2023. That’s when Dish risks losing its wireless spectrum licenses if it still hasn’t developed an operational wireless network.

Dish will start operating “the first standalone, cloud-based 5G Open Radio Access Network in the United States, beginning with Las Vegas later this year,” the company said in a statement. The statement said Amazon and Dish will work together to see how organizations including Amazon and AWS use 5G or build their own networks. Terms of the deal weren’t disclosed.

Dave Brown, vice president of AWS’ core Elastic Compute Cloud service, told CNBC’s “Tech Check” on Wednesday that the collaboration with Dish will “absolutely” serve as a sort of case study Amazon can take to other telecommunications providers to show that 5G networks can run in clouds, rather than in data centers with special-purpose infrastructure.

That could help Amazon expand its own cloud business, a key source of income that grew revenue by almost 30% in 2020.

Meanwhile, Microsoft, the second-largest cloud infrastructure provider behind Amazon, also is keen to get carriers building 5G networks in its cloud. AT&T uses Microsoft’s Azure cloud, and last year Microsoft acquired two companies targeting carriers. 

AWS already works with Verizon, the largest U.S. wireless provider.

— CNBC’s Alex Sherman contributed to this report.

WATCH: Amazon Web Services, Dish team up for cloud-based 5G network