Dish Network Earnings Snapshot: Subscriber Loss Continues

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Dish Network (NASDAQ:DISH) recently reported its Q3 fiscal 2016 earnings and while its subscriber loss slowed down after the worst quarterly drop of 281,000 in Q2, it still remained significant at 116,000. The company’s revenues edged up a little from $3.73 billion to $3.75 billion, and though its earnings increased significantly to 64 cents a share, they were marginally below the consensus estimate. With users actively shifting to streaming services such as Netflix, pay-tv companies are losing their subscribers rapidly. In response, Dish had launched its streaming service (called Sling TV) last year, which is somewhat diluting the subscriber loss at the moment. Even though the change in subscriber count at the end of 2015 (-81,000) did not look too bad, subscriber losses are expected to accelerate as the Sling-TV novelty wears off.

A while back, Dish completed its payment to participate in the U.S. Federal Communications Commission’ (FCC) ongoing auction involving sales of spectrum formerly held by television broadcasters. Over the years, the company has invested more than $5 billion in acquiring wireless spectrum, and the turmoil in Dish’s core business has highlighted its stance on the acquired spectrum. The company’s participation in the auction suggests that it may be planning to sell a portion of its spectrum for profit. However, in case the FCC spectrum auctions get delayed, the company may be forced to put its spectrum to use in the near future, because the spectrum is subject to the FCC’s interim and final build-out requirements. Even if Dish builds a wireless network just to abide by the regulations, it could cost the company billions of dollars.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Dish Network
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