DISH’s Las Vegas network goes live as total number of subscribers dwindles
The executives of DISH Network Corp. hope the launch of its 5G network in Las Vegas will be the start of a new era for its struggling consumer businesses.
On May 4, DISH launched its Las Vegas 5G network, also known as Project Genesis, to all of its customers. The network experienced a series of delays caused by regulatory issues and supply chain delays in 2021.
DISH plans to transform Project Genesis into retail brands to compete in different market segments after analyzing initial user data.
“With Project Genesis, we have been in beta user mode for most of the first quarter,” said DISH President John Swieringa. “We’re looking to attract a kind of grassroots user, early access users who can and do provide feedback to us on the network on a fairly regular basis.”
Although the Las Vegas project represents a major growth opportunity, DISH’s subscriber count is on the decline. The number of retail wireless network subscribers decreased by approximately 343,000 in the first quarter, compared to a net decrease of 161,000 in the prior year quarter. DISH ended the quarter with 8.2 million retail wireless subscribers.
The net number of pay-TV subscribers fell by approximately 462,000 in the first quarter, compared to a decline of approximately 230,000 in the corresponding quarter of the previous year. The company ended the quarter with 10.2 million pay-TV subscribers, including 7.99 million DISH TV subscribers and 2.3 million SLING TV subscribers.
MoffettNathanson analysts said DISH’s rapidly declining subscriber numbers and negative EBITDA were weighing on the company’s outlook.
“Rising interest rates and patience on the downside with long-standing investment histories create a difficult backdrop for a company like Dish; Dish’s nascent 5G wireless network business is nothing if not is a long-running speculative story,” MoffettNathanson analyst Craig Moffett wrote in a research. Remark.
DISH Executive Chairman Charlie Ergen said DISH continues to have a strong relationship with mobile virtual network operator partner AT&T Inc., but the ongoing battle between DISH and T-Mobile US Inc. have a financial impact on DISH. DISH and T-Mobile were at odds over T-Mobile’s decision to shut down Sprint’s old 3G CDMA network as T-Mobile moves to 4G LTE and even 5G. The shutdown began on March 31 and is expected to be completed by May 31.
“There’s just a lot of expense that we weren’t expecting there and a lot of focus on operational things that our management team had to deal with and that we [did not foresee]”, Ergen said.
Revenue totaled $4.33 billion for the quarter, compared to $4.50 billion for the prior year period.
Net income attributable to DISH was $433 million for the quarter, or 68 cents per share, compared with $630 million, or 99 cents per share, a year ago.
S&P Capital IQ’s consensus estimate for fourth-quarter EPS was 75 cents on a normalized basis.
DISH executives told analysts on their May 6 call that more details about DISH’s wireless strategy will be shared at its analyst day on May 10.
“It’s become clear that they will disproportionately target the enterprise and wholesale segments, with a particular focus on private networks,” Moffett said. “Their commitment to retail has been much less clear.”
Shares of DISH closed at $22.22 on May 6, down more than 19% from the May 5 close.