Erik Carlson, CEO at US DTH operator Dish Network, says the company is hard at work on its wireless initiatives. “The wireless team continues to make progress on a standalone 5G networks and we continue to pursue closing the Boost assets with T-Mobile,” he commented
Carlson reported net income had fallen $73 million from a year ago although there was a heavy $356 million impairment charge because of the decision to close its activities in terms of IoT. Dish closed the quarter-year with 11.32 million subscribers (9.01 million on Dish, and 2.31 million on Sling).
Carlson told analysts that Dish continued to focus on winning and retaining longer-term profitable customers, commenting: “In the quarter, we saw Dish TV net subscriber loss of 132,000. Our pay-TV activation slowed, we did adapt our activity to match conditions. Given the massive impact Covid had on the travel and hospitality industry including airline and hotel chains. We took the step of removing approximately 250,000 subscribers representing Dish TV commercial accounts or ending pay-TV.”
Carlson added that the company expected the bulk of these disconnects to renew their subscriptions once the pandemic was over.
“Turning to Sling, in the quarter Sling lost 281,000 net subscribers compared to net adds of 7,000 during the period.” This was disappointing Carlson admitted.
CFO Paul Orban told analysts that the company, because of the Covid-19, had been forced to suspend many of their marketing activities.
“Now that the T-Mobile/Sprint merger has closed and there is more clarity surrounding our revised build-out requirements. We no longer intend to finish our narrowband IoT build. Accordingly, we recorded impairment in the quarter from the narrowband IoT assets and satellites that we currently do not plan to use in our 5G build,” Orban said.
Tom Cullen, EVP/Corporate Development explained the process for the company’s move into wireless, saying “Our deployment team is already doing RF planning and we’re far down the road with our tower company discussions. So the deployment planning has begun on our side.”
Company founder Charlie Ergen updated analysts on Dish’s current financials, saying: “What we have done over the last 13 months, we’ve paid down $2.5 billion of debt and we raised $1 billion of equity. With $900 million of cash in the balance sheet during the quarter, I think you can anticipate that we’re positive cash flow. We’re going to spend $1.4 billion to purchase Boost.”
Ergen said that Dish had terminated its IoT plans. But the company was now well-placed for wireless.
“We’re building a state-of-the-art network, we’re aligned with the FCC, we’re aligned with the executive branch, we aligned with both houses of Congress on where that needs to go. And we have a timeline that says that’s manageable to do that. We’ve also MVNO deals work for seven years where we can start generating revenue with and we are purchasing Boost, so we start generating revenue day one with purchase of booth. We also can generate very profitable revenue as we build city-by-city,” added Ergen.
The results and analyst discussions impressed Guggenheim Securities which in a report to clients repeated its ‘BUY’ rating on Dish Network and issued a target price for Dish shares of $53 which suggested a 106 per cent upside. May 8th saw an instant 10 per cent rise in Dish shares (to $25.73).