Dish's financial adventures continue

Dish Network's parent company backtracked on an attempt to reorganize around $5 billion worth of debt after the company's creditors teamed up against the plan and threatened legal action. However, Dish continues to work to raise money against some of the spectrum it's using to build its 5G network.

Taken together, the developments indicate that Dish remains intent on improving its financial footing by concurrently easing its debt requirements and scoring more cash for its 5G ambitions. Whether the company will ultimately be able to do that remains to be seen.

Dish first unveiled its latest fundraising plan just days after completing its merger with satellite company EchoStar. Both Dish and EchoStar are majority owned by Charlie Ergen.

Ergen's newly combined company officially goes by the name of EchoStar, with Dish as a subsidiary. The merger was in part designed to free up some additional cash for Dish's 5G efforts.

Shortly after the merger, EchoStar announced the transfer of certain spectrum licenses, alongside some of Dish's satellite TV customers, to a new holding company. Dish then sought to use a portion of those assets (the satellite TV customers) to back new debt that would help it pay for upcoming debt maturities.

However, as noted by Axios, that plan sparked an uproar because some of Dish's existing bonds already had a claim on those assets before they were moved.

Broadly, Dish's goal was to reduce the payments it needs to make on a portion of its $20 billion in debt.

Back to the drawing board

Dish announced this week it canceled its debt-exchange plans "in its sole discretion." As reported by Bloomberg, Dish's decision followed widespread complaints among its creditors.

It's not clear whether the company will make a more attractive offer unilaterally, start negotiating with its creditors for another deal or do something else. Company officials declined to comment on the topic beyond the company's press release.

To be clear, Dish is still pursuing a separate plan to reorganize around $4.9 billion in debt using its spectrum licenses as collateral. Holders of more than 60% of the company's convertible notes due 2026 have signed a cooperation deal for that plan, Bloomberg reported (subscription required).

Financial machinations aside, top company officials have said Ergen remains intent on pursuing the 5G market. Dish already operates roughly 20,000 cell sites around the country, which it is using to broadcast its 5G signals to roughly 70% of the US population.

Now, Dish is working to sell its Boost Infinite service to consumers through channels including Amazon. Beyond that, it's hoping to tailor its 5G network for enterprise services.

But Dish is under an FCC mandate to expand its 5G coverage via thousands of new cell towers by 2025 – a target Dish has pledged to meet. However, regulators have little incentive to punish the company if it doesn't meet its 2025 network-buildout target because Dish was positioned by regulators to replace Sprint as the nation's fourth big wireless network operator. That's why they agreed to approve T-Mobile's acquisition of Sprint in a deal that closed in 2020. Thus, it's likely that regulators will give Dish plenty of breathing room to be successful – potentially including pushing back its 5G network buildout targets – since the company already reached its 2023 FCC-mandated 5G coverage goal.

But FCC coverage targets are not the biggest obstacles Dish faces. The company is also working to challenge market behemoths like AT&T, Verizon and T-Mobile in the pursuit of 5G customers. And in that respect, Dish is facing competition that continues to gain hundreds of thousands of new customers every quarter. Thus, it's not clear whether Dish will be able to stop the steady stream of customers leaving its Boost Mobile service.

Dish is expected to report its fourth quarter results sometime in February.