& cplSiteName &

Time May Have Run Out for Dish Buyout

Mari Silbey

It was another difficult quarter for Dish, with revenue and net income continuing to slide and pay-TV subscriber numbers ever on the decline. Spectrum might have been Dish's ace in the hole at one time. But, with the core satellite business weighing so heavily on the company's balance sheet, it's not clear that even Dish's spectrum holdings can overcome its otherwise sagging fortunes, particularly where merger or acquisition considerations are concerned.

Analysts from MoffettNathanson LLC put it this way: "Dish reported results that suggest that its satellite TV business is now shrinking by 8.4% (by subscribers, excluding hurricane impacts), 4.3% by revenue, and 9.7% by EBITDA. 'Recurring EBITDA' is falling by a horrific 17.3%. Who would sign up for that?"

Dish Network LLC (Nasdaq: DISH) CEO Charlie Ergen, unsurprisingly, has a different perspective. Ergen continues to tout the value of the company's spectrum, while also suggesting that Dish's move to an over-the-top platform with Sling TV was a smart way to target a generation of viewers that have migrated away from traditional pay-TV services.

Unfortunately, those consumers who have selected Sling TV so far aren't having a positive financial impact on the company. Instead, between the cost of programming and the low Sling TV price tag, they're killing off profit margins. It may be cheaper to acquire OTT customers for Dish, thereby temporarily making the earnings mix appear brighter. But ultimately the total value of the company's pay-TV business is shrinking rapidly as higher-paying satellite customers flee for other market alternatives. (See Analysts: Dish Is in Dire Straits.)

As for spectrum, Ergen argues that Dish's portfolio gives it important flexibility for the future. Where some operators are focused on fiber densification, Ergen suggests that spectrum is the better asset, calling it "another bullet in the gun long term" and noting that it will be easier for operators to densify their wireline networks later if needed than it will be to acquire new spectrum capacity. Without speculating too far, Ergen also paints the latest failure of a merger between Sprint Corp. (NYSE: S) and T-Mobile US Inc. as a possible positive outcome for Dish, giving his company perhaps a "few more options" for a future spectrum deal.

Ergen points out that as Dish builds out its own wireless network, the focus is on a new paradigm where connectivity applies not just to people but to things, and that Dish, unlike legacy carriers, can treat wireless as a "blank sheet of paper."

However, Dish is entirely unproven as a wireless network operator, and where it might once have hoped for help from a partner, time is running out for the service provider to do anything but go it alone. Dish is required by the Federal Communications Commission (FCC) to develop new wireless infrastructure with its spectrum by March, 2020. (See Dish's 5G Plans Should Rouse Cablecos and Dish, Amazon Talk Wireless Tie-Up – Report .)

For all the latest news from the wireless networking and services sector, check out our dedicated mobile content channel here on Light Reading.

Total Dish revenue for the third quarter reached $3.58 billion, down from $3.77 billion a year ago, with net income dropping to $297 million from $318 million in the year-ago quarter. Excluding subscriber losses attributed to the hurricane disasters in Q3, Dish also shed approximately 129,000 pay-TV customers in the three-month period. Dish doesn't separate out Sling TV subscribers from its satellite subs, so the loss of traditional, higher-paying customers is likely higher with Sling TV gains added in.

Dish now has a total of 13.2 million pay-TV subscribers. Wireless customers? Those won't come on board until after Dish's network is built in 2020.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Featured Video
From The Founder
Light Reading is spending much of this year digging into the details of how automation technology will impact the comms market, but let's take a moment to also look at how automation is set to overturn the current world order by the middle of the century.
Flash Poll
Upcoming Live Events
November 30, 2017, The Westin Times Square
December 5-7, 2017, The Intercontinental Prague
March 20-22, 2018, Denver Marriott Tech Center
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
Hot Topics
When Will 6G Arrive? Hopefully Never, Says BT's McRae
Iain Morris, News Editor, 11/21/2017
Eurobites: Telefónica Reckons Plastic Is Fantastic for FTTH
Paul Rainford, Assistant Editor, Europe, 11/15/2017
Juniper's New Contrail VP Hails From Google
Craig Matsumoto, Editor-in-Chief, Light Reading, 11/15/2017
Let's Talk About 5G Efficiency, Not Wacky Services
Iain Morris, News Editor, 11/21/2017
Animals with Phones
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed
Partner Perspectives - content from our sponsors
The Mobile Broadband Road Ahead
By Kevin Taylor, for Huawei
All Partner Perspectives