Dish Points to June as When Wireless Fortunes Start Turning
Look to June as a major tipping point when Dish Network has sufficient scale in its 5G network and enough devices on that network to start turning a corner, company officials said Monday in a call with analysts as it announced Q3 financial results. Chairman Charlie Ergen said he was decreasingly optimistic about an 800 MHz deal with T-Mobile but hadn't written the prospects off. Liberty Latin American said it was buying Dish spectrum assets and 120,000 prepaid mobile subscribers in the Caribbean for $256 million, with Dish saying the deal frees it up to focus more on the continental U.S.
Dish today has slightly more than 120 million commercial POPs covering about a third of the country with its Boost Mobile and Boost Infinite services, Chief Operating Officer John Swieringa said. By June, that should be 240 million POPs, he said. About a third of handsets activated today will be compatible with its 5G network, and by June that number should reach two-thirds, he said. That work also should mean Dish spends a third less on its mobile virtual network operator agreement by June, he said. Those steps "really change the trajectory" of its retail mobile business, Swieringa said. Added Ergen, "we will have scale June of next year," albeit a year behind where it wanted to be.
For the quarter, Dish revenues were $3.7 billion, compared with $4.1 billion the same quarter a year earlier, the company said. It said it ended the quarter with 6.72 million satellite TV subscribers and 2.12 million Sling subscribers vs 7.61 million Dish subs and 2.41 million Sling subs a year earlier, and 7.5 million retail wireless subscribers, down from 8 million a year earlier. Dish stock closed Monday at $3.44, down 37.4%.
The results were "astonishingly bad," MoffettNathanson's Craig Moffett wrote investors. The company's problems are numerous, he said: a struggling Boost-prepaid business, a "stillborn" Boost postpaid business, a direct broadcast satellite business that was going to fund Dish's wireless ambitions "in free fall" and a collapsing Sling streaming video service. He said the numbers accelerate an already likely Dish bankruptcy in coming years.
The 800 MHz spectrum "has some unique characteristics," and Dish might be able to finance a deal if it comes up with a good business case for the spectrum, Ergen said. But even with a good business plan, the financing might not come together given how Dish stock has performed. "I think this quarter reduced the odds that we're going to be successful," he said.
Asked about fixed wireless interest, Ergen said he was "disappointed" the FCC so far hadn't ruled on the company's request to open the 12 GHz band to terrestrial mobile. He said hampering fixed wireless is all the federal money being spent on universal access that favors fiber. “If everything was fair and level playing field and the best technology won, I would be bullish on fixed wireless,” but fiber subsidization makes competition a challenge, said Ergen. Masa Capital scoffed on the X platform about the 12 GHz being a serious impediment to Dish having fixed wireless service.
Wireless net additions were hurt by a change in dealer commissions focusing on profitable subscribers rather than overall subscriber numbers, said Mike Kelly, executive vice president-retail wireless. Added Ergen, "Are we doing a great job of marketing? The answer is no." An example is that Boost isn't available through Apple stores, he said, also noting Boost is prioritizing online ordering via Amazon or other online partners and making that preferable to going into physical stores.
The Caribbean "is a challenging market ... a very competitive market" with weather challenges, and buildout would be expensive there, said Tom Cullen, Dish's executive vice president-corporate development. The Liberty Latin deal, expected to close on the Dish assets in 2024, will free up funds Dish can focus on the continental U.S., he said.
Asked about interest in an agreement with DirecTV, Ergen said the company's focus for now is on consummating its EchoStar deal (see 2308080009).