Can Dish Take Down AT&T?

As one cellular giant comes under fire for new data caps, one major satellite provider is attempting to break new ground. But has the battle already been lost?

Roughly 12 months ago, Dish Network

acquired the ailing video rental chain Blockbuster Video. Since that time, the company hasn't made too many big announcements. But if Dish's financials are any indication, the Blockbuster deal has already paid off,

. This accounted for a 24% boost in profits. While it does not appear that Dish's gains have been at the expense of Netflix

, which is viewed as the primary competitor in the streaming and on demand video market, it is unclear how Dish might impact the competition going forward. With Comcast

and Verizon

entering the streaming video market, the whole industry is starting to get very crowded. Now Dish is attempting to enter another crowded space: wireless services. Whether or not the company intends to launch a full mobile phone service, no one knows. But after a speculated venture with T-Mobile and other rumored plans that never came to fruition, Dish hopes to create a fresh wireless network of its own. Those plans have been put on hold, however, as the

recently reported that the FCC denied Dish's request for a waiver that would have helped the company “build a new, national high-speed wireless network.” According to the Wall Street Journal, Dish Chairman Charlie Ergen believes that his company must “package mobile wireless services with its pay-TV offerings to stay competitive with cable operators and phone companies that already can offer such bundles.” In this regard, that would make AT&T

Dish's chief competitor. While AT&T was once known primarily for its home phone service, the company has since become the nation's largest cellular carrier, scoring a multi-year deal with Apple

that allowed it to carry the iPhone exclusively for three years. Like most telecommunications companies, AT&T has its own broadband Internet service, and in more recent times, the company branched out into pay-TV with U-Verse. While those latter businesses have the potential to be strong revenue generators, AT&T earns the majority of its profits from its cellular services. With only four major cellular networks in America – AT&T, Sprint

, Verizon and T-Mobile – Dish could provide some much-needed competition for the industry. But it could wind up entering the market at a time when costs are on the rise, both to the provider and the consumer. Most wireless carriers raised their rates in 2011 or will do so in 2012. Even smaller companies like MetroPCS

are inching away from low-cost, flat-rate, all-you-can-eat monthly plans. And as we are all too aware, when a company no longer wants to provide unlimited data to its customers, it will just pull an AT&T and slow the speeds of anyone who streams high-bandwidth content. This could make it very difficult for Dish to offer any kind of cellular service. While the company will likely argue that its service is superior (as every carrier does), Dish is unlikely to enter the market with an unlimited data or minutes plan. Without any such option, what reason would consumers have to switch to Dish? When Comcast

announced its home phone service, it was able to do so at a competitive advantage. For a low monthly fee, users were given unlimited local and long-distance calling. AT&T and other companies have since adjusted their prices and launched digital home phone services of their own. But when Comcast first launched the service, it was viewed as a unique (and cheaper) alternative. Granted, Comcast entered the home phone service market with a massive ad campaign that trained consumers to believe it was the first to offer a service of that caliber. As the nation's leading cable provider, Comcast has a lot more money to burn than Dish. But if Dish is going to succeed in building a wireless network of any kind, it's going to need some very convincing promos. Even then, the battle will be far from easy. Dish may initially be tempted to take a loss and offer a stellar plan (10 or 20 gigs of data) at a very low rate. But if consumers are going to be screwed later on, what's the point? What Dish needs to realize is that, while it would be nice for consumers to have more choices – and for another competitor to knock some sense into the current crop of cellular providers – we don't actually need a fifth wheel. If Dish can't drastically change and (for lack of a better word) “disrupt” the industry for the better, the company shouldn't even bother. Some consumers might be tempted to switch to Dish if they can pay for a whole host of services on one bill. (Why that's so appealing, I'll never know). But most people will go with the services they want most, regardless of how many individual bills they create. If nothing else, Dish could offer subscribers one tantalizing proposition: unlimited data for streaming Blockbuster @Home. And if executed properly, that could be enough to get users to switch.