& cplSiteName &

Dish Mutating Into a Broadband Company

Brian Santo

Dish Network increased its revenue in its fourth quarter of 2015, but lost another 81,000 subscribers. It posted a loss, due to some special charges, including a half-billion dollar expense for spectrum purchased at auction last year.

Sifting through Dish's churn numbers reveals the company is experiencing a transformation. As of the fourth quarter, about 10% -- maybe more -- of the company's customers are subscribing not to the company's traditional satellite-based service, but to its new broadband-based Sling TV service.

Dish Network LLC (Nasdaq: DISH) signed up 2.7 million customers in the fourth quarter (it lost 81,000 more than it gained) and, according to the company, "The increase in our gross new Pay-TV subscriber activations primarily related to the activation of Sling TV subscribers."

The 10% estimate assumes "primarily" means at least a little more than half, or 1.4 million customers, of the 2.7 million new sign-ups. That number gets divided into 13.9 million customers total as of the end of the fourth quarter. Ten percent is a low estimate; the percentage could be as high as 17%.

The company positions itself as the low-cost alternative to other major video providers, but as such, it's in an increasingly tenuous position. Currently, MVPDs can grow their subscribership only through attracting viewers away from each other, Dish notes in its 10-K. Meanwhile, rivals are increasingly offering low-cost skinny bundles. Dish has countered with the budget broadband-based Sling TV service, but it does so at the risk of diminishing its own ARPU, its 10-K said.

The satellite providers, Dish and DirecTV, have always born high subscriber acquisition costs. DirecTV is now able to rely on the marketing muscle of new owner AT&T Inc. (NYSE: T) to help drive those costs down, but Dish reports it is in a situation where subscriber acquisition and retention costs are more apt to go up than down.

With 13.9 million subscribers, Dish still ranks among the biggest MVPDs in the US, but its biggest rivals keep getting bigger, more diversified and/or international while Dish isn't getting any of those things. Top competitors include Comcast Corp. (Nasdaq: CMCSA, CMCSK), Verizon Communications Inc. (NYSE: VZ), AT&T/DirecTV, Charter Communications Inc. /Time Warner Cable/Bright House Networks (assuming that deal gets approved) and Altice /Suddenlink/Cablevision (the Cablevision deal is also still pending approval).

Operational diversification remains a possibility, though. Dish already owns wireless spectrum, directly or through subsidiaries purchased over the years. The company placed winning bids in last year's AWS-3 FCC spectrum auction, hence its $516 million fourth quarter charge.

Want to know more about the video distribution market? Check out our cable channel here on Light Reading.

Dish said it will have to raise a significant amount of capital for a wireless build-out, and partnering with another company or companies is a possibility. The company would be entering a market that most analysts believe can support three major carriers. There are four now (AT&T, Verizon, T-Mobile, Sprint).

The company did not provide any hint of a schedule for implementing a wireless plan in its 10-K. The company is not required to have done anything with most of its spectrum holdings until 2020 or 2021, according to the document.

Of course, Dish has been and remains a favorite object of merger speculation. Dish and DirecTV danced around joining forces for years before AT&T bought DirecTV. AT&T's takeover is recent, but is already showing signs of being successful, thus inspiring dreams on Wall Street that Verizon will copy the strategy and buy Dish.

Dish did not comment on any specific rumors, but did say in its 10-K that "It may be difficult for a third party to acquire us, even if doing so may be beneficial to our shareholders, because of our ownership structure."

With his stock holdings, CEO Charlie Ergen controls approximately 78.5% of voting power in the company. Nothing happens to Dish without his approval.

The company also took a charge of $123M for impairment of its D1 satellite and related ground equipment in Q4. The company has had trouble with this satellite before, taking an impairment charge for it a year ago, in the fourth quarter of 2014. Dish has two new satellites scheduled for launch in the second half of this year that will have enough signal capacity to compensate and then some.

— Brian Santo, Senior Editor, Components, T&M, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
Wednesday, October 26, 1:00PM EDT
Security: Tackling DDoS
Gary Sockrider, Principal Security Technologist, Arbor Networks
Friday, October 28, 1:00PM EDT
Security: The Plusses and Minuses of Open Source Software
Nick Feamster, Acting Director, Center for Information Technology Policy, Princeton University
Wednesday, November 16, 1:00PM EST
SDN 101
John Isch, Practice Director, Network & Voice, Orange Business Services
Friday, November 18, 1:00PM EST
SDN & Open Source
Christopher W. Rice, Senior Vice President of AT&T Labs, Domain 2.0 Architecture and Design
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
Next-Generation Technology Beyond DOCSIS 3.1

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Liu Jianhua speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Hybrid Video Solutions to Change TV, Change Future

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Ian Locke speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei Future-Oriented Giga Coax Network

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Allen Wang speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei at SCTE 2016

10|20|16   |     |   (0) comments

Join Alan Breznick of Light Reading and take a sneak peek at the Huawei booth at SCTE 2016.
LRTV Custom TV
Assuring Network Quality in a Rapidly Changing Environment

10|20|16   |     |   (0) comments

As the rate of change and complexity increases in agile networks, the importance of introducing DevOps methodologies for integrating active test and assurance solutions throughout the full service lifecycle becomes critical to ensure that customers are experiencing the service quality they demand. The industry landscape is changing, and software-based test and ...
Telecom Innovators Video Showcase
A10 Networks on Service Providers' Industry Needs

10|20|16   |     |   (0) comments

Light Reading's Steve Saunders hears how A10 enables service providers to accelerate, secure and optimize their application delivery to drive down costs, enhance service availability, and better respond to customer requirements, so they can improve customer satisfaction, monetize their network, and grow revenues.
LRTV Custom TV
New NFV Use Cases for Cable TV

10|19|16   |     |   (0) comments

A large number of NFV use cases are focused on the enterprise domain, looking at virtualization of customer-premises equipment (CPE). To date, there has been little focus on the use cases and business case for virtualization of the video content delivery networks required to deliver unicast and streaming video to consumers. Amdocs commissioned Analysys Mason to ...
Women in Comms Introduction Videos
Meet the Future Workforce: New Faces, Expectations & Motivations

10|19|16   |   5:33   |   (1) comment

Millennials and their younger peers, Gen Z, expect more out of their network and more out of their work. Intel's Lynn Comp shares how the industry can prepare for this new generation of workers.
LRTV Custom TV
ZTE Global Services User Congress 2016 Highlights

10|19|16   |     |   (0) comments

ZTE held its 2nd Global Service User Conference in Dusseldorf on October 13-14. Representatives from network operators, leading industry analysts and ZTE senior expertsattended the event, exploring the best practice in managed services and the vision to transform network operations into the operations center of the future (OpCF) in the software-defined networking ...
LRTV Custom TV
Cliff Grossner on Cloud & Network Synergy From Carrier Service

10|18|16   |     |   (0) comments

Local carriers offer the collaborated cloud and network service that benefits from their understanding of the regulations operating in different vertical markets.
In this interview, Cliff Grossner from IHS Technology talks about how this advanced service can support business agility and flexibility.
LRTV Custom TV
VeEX: Live from SCTE Cable-Tec Expo 2016

10|17|16   |     |   (0) comments

Cyrille Morelle, VeEX's President and CEO, talks with Light Reading's Alan Breznick live from the SCTE Cable-Tec Expo 2016. They discuss DOCSIS 3.1 technology, deployments and early lessons learned. New products on display include the CX350s-D3.1, CX380s-D3.1, CX310, AT2500-3G, FX150 OTDR and MTT WiFI Air Expert.
LRTV Custom TV
Smith Micro's Carrier-Grade WiFi Component

10|17|16   |     |   (0) comments

Join Carol Wilson of Light Reading as she interviews the CTO of Smith Micro, Dave Sperling.
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Attacks Have Major Internet Sites on the Ropes
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 10/21/2016
Verizon Wants More Data on Yahoo Breach
Alan Breznick, Cable/Video Practice Leader, Light Reading, 10/20/2016
WiCipedia: Grace Hopper Promotes Diversity, Girl Scouts Code & How to Thrive
Eryn Leavens, Special Features & Copy Editor, 10/21/2016
Layer3 TV Comes to Town, Hints at Future
Mari Silbey, Senior Editor, Cable/Video, 10/21/2016
Telecom Italia Plots Digital 'Overlay,' Not Transformation
Iain Morris, News Editor, 10/17/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
Animals with Phones
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.