Dish Called Serious on Wireless; Video Prospects Seen as Shakier
Whether Dish Network can keep going its Q3 video subscriber-loss rebound remains to be seen. CEO Erik Carlson called the 66,000 decline in direct broadcast satellite subscribers "notable progress." Wall Street was less bullish but saw Dish as increasingly confident in its wireless strategy.
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The wireless ambitions "are seemingly very real," Wells Fargo's Jennifer Fritzsche wrote investors Thursday as the DBS provider announced Q3 results, citing the company's hiring of wireless executives (see 1911070036). Dish's building its wireless team could lessen concerns of state attorneys general fighting T-Mobile's buying Sprint and divesting assets to Dish, the analyst said. Citi's Michael Rollins said Dish's plans to raise $1 billion also speak to the company's bullishness on wireless, and it all rides on T-Mobile/Sprint/Dish.
Carlson told analysts the satellite TV subscriber loss is "notable progress." He said Dish was hurt by its programming disputes and helped by programming disputes at rivals, while Sling grew subscribers through promotions and its pricing.
Dish revenue was $3.17 billion, down from $3.4 billion in the year-earlier period. It ended the quarter with 12.18 million U.S. pay-TV subscribers, including 9.49 million Dish subs and 2.68 million at Sling. A year earlier, it had 12.65 million: 10.28 million at Dish and Sling's 2.37 million.
Dish may have reached equilibrium where most vulnerable subs left and it's benefiting from "the utter meltdown" at AT&T's DirecTV and from price hikes at other vMVPDs including DirecTV Now, MoffettNathanson's Craig Moffett emailed investors. He said Dish's shrinking over the past nine years -- with subs peaking at 14.3 million in Q4 2010 -- leaves behind "an increasingly rural (and inertial) core." Sling TV Group President Warren Schlichting said Dish picked up some DirecTV customers.
The price war in mobile is "proving our point," Chairman Charlie Ergen said. T-Mobile announced it would offer prepaid service for $15 monthly, half the price of the lowest current plan, and roll out more 5G (see 1911070066). Ergen said with the U.S. having the highest prices for mobile service, Dish has an opportunity to be disruptive, especially as it builds its network from the ground up. He said not having to support legacy 2G, 3G and 4G networks will cut Dish costs and make it far more capable of network slicing. Legacy networks face far higher capital costs, he said. "It's brutal to try to change your software on the network.” Dish said it doesn't anticipate notable capital spending in the foreseeable future on satellites, as the EchoStar satellites it picked up in the broadcast satellite business acquisition (see 1909100010) give it better standing on fleet management.
Ergen urged the FCC to look at multichannel video distribution and data services spectrum for terrestrial 5G. Dish is a member of the MVDDS 5G Coalition, which urges opening the 12 GHz band (see 1903270006).
Asked about its role in getting Colorado AG Phil Weiser (D) to exit states' T-Mobile/Sprint lawsuit (see 1910210053) and the company doing likewise with other states, Ergen said, "We pay our taxes here, we’d like to stay here and we’d like our corporate headquarters to be here. The Colorado state attorney general looks out for Colorado.”
Dish needed to do a better job of selling the benefits of the deal to the minority FCC commissioners, Ergen said. The FCC order approving the deal passed 3-2 (see 1911050055).
The satellite provider's stock closed up 3.5 percent at $34.69. EchoStar rose 4 percent to $41.10.