Dish loses more satellite TV customers as it embarks on a 5G mobile future


Days after outlining how it plans to rise from out of nowhere as a major wireless provider in the United States and launch 5G service by the end of next year, Dish today reported its second quarter earnings — and they’re another reminder of exactly why the satellite TV provider is morphing into a mobile carrier.

Dish lost 79,000 satellite subscribers in the quarter. The company’s streaming TV service, Sling TV, added 48,000 customers, but that still left Dish with a net loss of 31,000 customers and continues the narrative that pay TV is on the decline. Satellite is sagging, but Sling TV is a bright spot; it’s growing and stands out from rivals as the most inexpensive of the major internet TV services. Still, competitors like YouTube TV and Hulu are quickly catching up even after Sling’s head start. So after years of talking about it, Dish is branching out into mobile, and it got an assist from the US Department of Justice to get there.

If the T-Mobile and Sprint merger overcomes a challenge from several US states, Dish will come away with all of Sprint’s prepaid businesses including Boost Mobile (9 million customers in all), the carrier’s 800MHz spectrum licenses, and unfettered access to the merged carrier’s network for 7 years. But reinventing itself could come at a cost: Dish is paying a total of $5 billion for all that, and Dish chairman Charlie Ergen, who played a direct role in negotiations between T-Mobile, Sprint, Dish, and the Justice Department, has said the second phase of Dish’s mobile buildout will demand at least another $10 billion.

“I’m certainly willing to put more money in this company if that’s what it takes,” Ergen said during the company’s earnings call on Monday afternoon. Remember that the Verizons and AT&Ts of the world have been pouring money into their networks for decades at this point. Starting from scratch is a daunting proposition — even if you’ve got the spectrum to do it.


Dish Network Corporation Chairman Charlie Ergen responded to questions during an “Entrepreneurs Unplugged” event at the University of ColoradoTuesday night, April 17, 2012. Karl Gehring/The Denver Post

Dish chairman Charlie Ergen
Photo By Karl Gehring/The Denver Post via Getty Images

And yet Ergen wants Dish to become a mobile carrier quickly, telling The Wall Street Journal “we’ll get someplace in three years that will take the other guys 10 years” and floating ideas like on-demand data plans that would cost less money during off-peak hours. At least while Dish works to erect 5G infrastructure, it’ll be able to fall back on T-Mobile’s network — something it wouldn’t have necessarily had if it had tried to use its existing spectrum holdings to become a mobile carrier earlier.

“It didn’t make any sense to build a 4G network and tear it all down the next year,” Ergen said, replying to criticisms that Dish had been a do-nothing spectrum hoarder.

Now, Ergen is confident that these divestitures pushed for by the Justice Department will put his company in an advantageous spot, allowing it to finally use all the spectrum it’s acquired through the years to build out a standalone 5G network. “We weren’t hoarding spectrum,” he told Axios last week. “We were accumulating enough spectrum to go compete against the industry giants.” He also told the Journal that he once aimed to acquire Sprint but was outbid by SoftBank, the company that’s effectively cashing out with the $26 billion merger.

But even the merger assets and $10 billion won’t be enough to go toe to toe with Verizon, AT&T, or the New T-Mobile, so it’s going to be interesting to see what Dish does next. Dish could pursue more capital — the company is confident it’ll have an easier time now that it’s got an actual, clear plan — but it’s also allowed to partner with other companies such as Google or Amazon in its mobile effort. It’s barred, however, from outright selling ownership of the assets it’s getting from T-Mobile and Sprint for the next few years.

Dish’s relatively small stature may be why its 5G network is going to be a city-by-city process; in the meantime, the company will focus on Boost Mobile and expanding it from the prepaid-only offering it is today to a brand that also includes postpaid service. Like other carriers, you can count on Dish combining its video and mobile products. A Sling TV and Dish Mobile bundle is all but guaranteed.

Of course, all of this rests on T-Mobile and Sprint getting over the last big hurdle their merger faces. Ergen, a former professional poker player, said “I’m not a gambler” during today’s call and assured investors that the odds are very, very good that everything goes through as laid out last week.

Source: Dish loses more satellite TV customers as it embarks on a 5G mobile future

By Chris Welch

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