Wall Street is fed up with Dish Network

Dish Network's stock has lost more than 71% of its value over the past 12 months. Today, the company's shares sit at a 15-year low, and the slide may not be over.

"We are downgrading Dish," wrote the financial analysts at UBS in a report to investors this week. The investment firm is now rating Dish's shares as "Neutral," down from a previous rating of "Buy."

The UBS analysts aren't alone.

"In light of recent events, performance and market realities, we are downgrading our rating to 'Underperform'," wrote the financial analysts at BofA Global Research in a note to Dish investors late last month.

There are plenty of reasons for the downgrades:

Based on all that, the financial analysts at New Street Research have some advice: "Dish investors should prepare to be patient," they wrote in a note to investors this month.

The sales pitch

Despite the challenges, Dish is moving forward with grand plans to build a state-of-the-art open RAN 5G network. That network is supposed to feature programmable, cloud-native functions that appeal to enterprise users – already the company is promoting some of its network application programming interfaces (APIs).

Figure 1: (Source: Finn Hackshaw on Unsplash)

The company has developed "TaaS," or testing as a service, to test 5G networks and slices, according to a recent post authored by Dish's Arpit Agarwal, Surbhi Bhutani and Tamanna Kawatra.

"[TaaS] returns big data that helps build data products for immediate use for insights and improvements," they wrote. "When building new applications and different layers (e.g., RAN, core, transport), you can use TaaS to collect data and troubleshoot to efficiently identify potential problems before they become defects. It's a powerful service that allows you to forget about latency and network breakage."

Dish officials argue that the company's approach to 5G is light years ahead of what Verizon, T-Mobile and AT&T can offer.

"It boils down to we have a modern, 5G, smart network based in the cloud on open RAN principles… That's Netflix versus Blockbuster," explained Dish Chairman Charlie Ergen, during the company's February earnings call.

"It took Netflix some time. Wall Street was very skeptical of them early on," Ergen added. "It took them time to prove the concept. But it was better, faster, cheaper. And it's pretty hard to fail in business if you're better, faster, cheaper. And our network is going to be better, faster, cheaper."

Dish is making some progress. Fox and Duke University are among those kicking the tires on the company's enterprise offerings. But such developments haven't convinced investors that there's a bigger payoff coming.

Further, Dish has competition in the market for advanced, programmable 5G services. For example, LotusFlare recently boasted of its work with T-Mobile to expose network APIs for 5G services, thus allowing developers to build Internet of things (IoT) services.

It's not clear how much traction the API offering from LotusFlare and T-Mobile has enjoyed. But it's fair to say that T-Mobile isn't basing its corporate future on the successful sale of those APIs.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano