Dish Network's legacy pay-TV business took another hit in the fourth quarter of 2022. But Dish paired that with narrower mobile retail subscriber losses and some progress on its 5G network buildout.

In prelim results disclosed Tuesday, Dish said it shed another 191,000 satellite TV subs, a bit worse than the 180,000 losses expected by analysts. That result lowered Dish's satellite subscriber total to 7.41 million. With its advantage in rural parts of the country dwindling amid new fiber and fixed wireless entrants that can support streaming services, the rate of decline for Dish's satellite TV service dipped to 9.8%, its worst since 2019, according to MoffettNathanson (a division of SVB Securities).

"Dish's retreat-to-rural strategy worked well for a time. But it leaves them increasingly vulnerable to these various rural incursions," MoffettNathanson analyst Craig Moffett explained in a research note (registration required).

Sling TV, Dish's Internet-delivered/streaming pay-TV service, lost 77,000 subs, well off the 16,000 losses expected by analysts. Sling TV ended the period with 2.33 million subs, making it about the same size it was in early 2018, Moffett pointed out.

The rate of decline for Dish's total pay-TV service dropped to -8.9%.

Figure 2: Click here for a larger version of this image.

5G build rate of 1,000 sites per month

Things looked a bit better on the mobile side. Dish lost 24,000 Boost retail subs in Q4, better than the -63,500 expected by analysts, and much improved from a year-ago loss of -245,000. Dish ended the quarter with 7.98 million wireless subs.

Moffett expects the company's new Boost Infinite postpaid offering, which Dish anticipates being more profitable than its prepaid business, to start to impact results in 2023. The wide rollout of Boost Infinite has been pushed to the first quarter of this year after "operational issues" delayed an original plan to go wide with it last fall.

Figure 1: (Source: Dish)

Meanwhile, Dish said it's making progress on its 5G build. As of December 31, 2022, the company had started construction on over 15,000 5G sites that, if completed, will be capable of providing broadband coverage to over 60% of the US population, Dish noted in this SEC filing.

"Construction starts are continuing at a rate of approximately 1,000 5G sites per month," the company added. That suggests a "runway that reaches into Spring 2024," Moffett noted.

$500M debt offering for wireless infrastructure

Dish timed the announcement of its non-financial prelim Q4 metrics with a new $500 million secured debt offering that will be used to help fund its planned $10 billion wireless network buildout.

According to the analysts at Raymond James, Dish's spectrum assets are backing the debt offering.

"As we wait for the pricing of these notes, we think DISH will need to raise additional money later this year, and our previous model assumed $2B in total debt raised in 2023 (all in 1Q23) and another $2B in 2024 (all in 1Q24)," they wrote. "We feel there is additional capacity for DISH to raise more spectrum-backed debt, but think it is willing to wait until closer to needing the money given the expensive carrying cost it would pay."

Dish, Moffett agreed, "will need steady infusions of new capital" to achieve its 5G buildout goals.

Per recent estimates from New Street Research, Dish will eventually need to deliver 5G signals from about 35,000 cell towers to meet the FCC's overall network coverage requirements.

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— Jeff Baumgartner, Senior Editor, Light Reading