Dish Wireless keeps its imperfect record intact in Q3; another 121,000 customers depart on a net basis


Dish Wireless keeps its imperfect record intact in Q3; another 121,000 customers depart on a net bas

Dish Network has yet to make a splash in wireless even though it is supposed to replace Sprint as the nation’s fourth-largest carrier. That was the deal that was made by T-Mobile and Sprint that allowed the former to acquire the latter. Because the loss of Sprint reduced the number of major U.S. carriers by 25%, the FCC wanted a new company to become the “fourth nationwide facilities-based network competitor,” and that title goes to Dish.

Dish and T-Mobile break up after T-Mobile turns off Sprint’s 3G CDMA network two years earlier than promised

Dish bought Sprint’s prepaid operations and customers including Boost Mobile, Virgin Mobile, and Sprint’s own prepaid business. These operations provided Dish with 9.3 million subscribers in all 50 states and Puerto Rico. 400 employees and 7,500 retail stores were transferred over to Dish. The latter signed a seven-year MVNO deal with T-Mobile thus allowing it to sell wireless service under the Dish name without owning its own network.

But this past July, after T-Mobile decided to sunset Sprint’s 3G CDMA network after one year instead of the three years it originally promised, Dish decided to drop its MVNO deal with T-Mobile and will pay AT&T $5 billion over 10 years instead. Dish Network explained by stating that “T-Mobile has announced its intention to turn off the Sprint CDMA network—home to millions of Boost subscribers—on January 1, 2022. This is significantly sooner than the three-year migration timeline it previously announced.”
Today, Dish released its third-quarter earnings and revealed that it lost 121,000 wireless subscribers on a net basis. That is a 43% improvement year-over-year. At the end of the third quarter, Dish had 8.77 million retail wireless subscribers compared to the approximately 9 million subscribers it had when the deal with Sprint closed in July 2020.

Most of Dish’s wireless customers are subscribed to Boost Mobile via its prepaid wireless business. Dish has been growing wireless subscribers on a gross basis which one analyst sees as a positive. William Ho, principal at 556 Ventures, says, “There are losses, but it’s less. You kind of offset churn by increasing gross adds,” which typically require a lot of promotional activity and expenditures.”

Speaking of churn, that number was 4.61% for Dish’s wireless business during the third quarter. That compares to T-Mobile’s prepaid churn of 2.9% for the same quarter. AT&T’s prepaid churn was 3% during the third quarter while it’s Cricket prepaid business had an even lower churn for the three months.

Dish has lost retail subscribers from its wireless business every quarter since it started operations and Ho expects to see more of the same during the current quarter, the fourth in 2021. One of Dish’s main competitors is T-Mobile’s prepaid business which is in the middle of an aggressive promotion at Walmart.

Things could change for the better once Dish finishes building out the nation’s first cloud-native, Open RAN-based 5G broadband network. The build-out is taking place in over 40 markets in the country. Open RAN (Radio Access Network) supports interoperation between equipment from different vendors. The goal is to build a flexible 5G network at a lower cost and speed up time to market.

Dish shares take it on the chin after the report is issued

You might recall that back in August 2020, Dish bought Ting Mobile which included 200,000 Ting subscribers. A little more than half a year later, Dish brought Republic Wireless and its 200,000 subscribers into the fold.

Dish investors were not happy with the report and investors spent the day dumping it. The shares lost nearly 14% in value after the report was released, losing $6.01 to close at $37.08. As it turns out, the wireless business might not have had anything to do with the decline in the company’s shares. Pay-TV subscribers, which had risen by 116,000 during last year’s third quarter, declined by 13,000 this year.

The truth is that it is too early for investors to come to a conclusion about whether Dish will succeed in the wireless industry.



Source link