Below are key drivers of Dish Network's value that present opportunities for upside or downside to the current Trefis price estimate for Dish Network:
For additional details, select a driver above or a division from the interactive Trefis split for Dish Network at the top of the page.
Dish Network is one of the largest pay-TV providers in the U.S. The pay-TV market includes cable providers such as Comcast, satellite providers such as DirecTV, and telecom providers such as AT&T and Verizon that offer fiber optic TV services. Dish is the second-largest satellite TV provider in the U.S. after DirecTV. Dish makes money by charging digital TV subscription fees to customers, selling digital TV boxes, selling premium services like HD and DVR, and by charging advertisers to advertise on some of the channels it carries.
Dish is also an emerging wireless player. Dish invested over $20 billion to acquire wireless spectrum licenses, including AWS-4, AWS-3, and licenses in the 600 Mhz bands. The company also entered the retail wireless market in 2020, via its acquisition of Boost Mobile, which operates as a mobile virtual network operator. Dish is also building out its own 5G network, as it needs to meet the FCC guidelines of reaching 70% of the U.S. population with its spectrum.
Per our estimates, most of Dish's value still comes from its satellite TV service. This is due to the division's high average revenue per subscriber, which stood at $100 in 2021. We estimate that the average revenue per subscriber will grow to over $130 by the end of our forecast period. Margins for the division are also quite high, at 39% in 2021.
Dish has made significant investments in the spectrum over the past few years and is now one of the largest wireless spectrum holders in the United States. The company has spent a combined sum of over $20 billion in acquiring its spectrum and is building out a 5G network, with plans to invest over $10 billion in the next few years. While Dish's 5G network will also serve retail users, the enterprise space will likely be a key market. Dish is focusing on building a cloud-native network that could allow it to provide virtually partitioned slices of its network designed to the exacting needs of industrial users.
Dish’s spectrum assets could provide investors with downside protection even if Dish’s wireless buildout and monetization don’t go as well as planned. The company holds around 150 MHz of value sub-6 GHz frequency, compared to Verizon and AT&T, which hold around 290 MHz each, per UBS. Although regulations prevent existing wireless carriers from buying Dish’s spectrum assets before 2026, the spectrum is nevertheless increasingly valuable given the growing demand for bandwidth following Covid-19, the higher spectrum intensity of 5G versus earlier technologies, and also due to the limited availability of airwaves.
Dish Network and pay-TV service providers, in general, face a threat from emerging online video platforms such as Netflix and Hulu. Although these platforms mostly provide content that is not running live on TV, they are now slowly penetrating the pay-TV provider's core turf. Netflix's successful entry into original programming is an example.