Dish Network has reported revenue totaling $4.45 billion for the quarter ending Sept. 30, compared to $4.53 billion for the corresponding period in 2020.
Net income attributable to Dish Network totaled $557 million for the third quarter 2021, compared to $505 million from the year-ago quarter. Diluted earnings per share were $0.88 for the third quarter, compared to 86 cents per share during the same period of 2020.
Net Pay-TV subscribers decreased approximately 13,000 in the third quarter, compared to a net increase of approximately 116,000 in the year-ago quarter. The company closed the quarter with 10.98 million Pay-TV subscribers, including 8.42 million Dish TV subscribers and 2.56 million Sling TV subscribers.
Retail wireless net subscribers decreased approximately 121,000 in the third quarter, compared to a net decrease of 212,000 in the year-ago quarter. The company closed the quarter with 8.77 million retail wireless subscribers.
Dish Network’s 2021 revenue through the third quarter totaled $13.43 billion, compared to $10.94 billion in revenue from the same period last year. In the first nine months of 2021, net income attributable to Dish Network totaled $1.86 billion, compared with $1.03 billion during the same period last year. Diluted earnings per share were $2.93 for the first nine months of 2021, compared with $1.77 during the same period last year.
Detailed financial data and other information are available in Dish Network’s Form 10-Q for the quarter ended Sept. 30 filed on Nov. 4 with the Securities and Exchange Commission.
Dish Network and Helium are collaborating to support open source, low-cost wireless connectivity ecosystems, according to Dish. Dish said that it would be the first major carrier to use Helium Network’s blockchain-based incentive model with customers deploying their own 5G CBRS-based hotspots. Dish Network is building a virtualized, standalone 5G broadband network; Helium is known for decentralized unlicensed wireless networks, according to Dish.
“The Helium Network is a consumer-deployed, decentralized wireless infrastructure that produces and delivers data-forwarding hotspots,” a statement from Dish reads. “By installing a hotspot in the home or office, a customer can provide or strengthen 5G wireless coverage using CBRS spectrum. In return, a customer will earn rewards in the form of $HNT, a Helium Network-based token. Powered by the company’s blockchain, the Helium Network is creating a new wireless economy through a breakthrough economic model known as the burn-and-mint equilibrium.
Chris Ergen, head of the Dish Office of Innovation said that blockchain technologies hold potential for the wireless industry.
“Helium is among the leading innovators who have demonstrated that the blockchain incentive works by creating the largest decentralized, unlicensed wireless network across the United States,” Ergen said.
The news about the latest waltz in the telecom sector (between Dish Network and AT&T) has been seen on just about every media outlet by now. Just in case you missed it, they have inked a new, long-term strategic Network Services Agreement (NSA) (said to be worth upwards of $5 billion) making AT&T the primary network services partner for DISH MVNO customers.
One comment was that this deal is simply a swap-out of T-Mobile for AT&T in Dish’s plans going forward. But there is a bit more to it than just that.
One of the key issues surrounding this agreement is that Dish is under a federal mandate to have wireless service to the rest of the country after 2023. This deal makes Dish an MVNO “indefinitely,” and has to potential to let Dish off the hook for fulfilling its federally mandated requirements should it falter (and there is substantial belief that it may). Not a bad plan for Dish to find some breathing room (rumor has it that T-Mobile was not willing to discuss extending their agreement past 2027).
Drilling down on that hard stop in 2027, while that seems like a lot of years for Dish to accomplish its goals, some analysts believe Dish would not have been able to meet federally imposed deadlines on its wireless buildout. Perhaps they are more concerned than they let on and saw that as a potential problem if things do not go according to plan. The AT&T deal adds six more years (to 2023) to that when all is said and done.
This is significant because Dish is obligated, under the terms of the consent decree between Dish, T-Mobile, Sprint, the DOJ, and the FCC, to build out wireless facilities covering 70 percent of the U.S. population by 2025. Dish notes that they are not worried that this goal can be reached since that 70 percent is collected in less than three percent of the U.S. landmass. Without an MVNO agreement to fall back on, Dish would have to build out the rest of the country, of which the next 25 percent occupies nearly ten times the landmass of the first 70 percent. And the number goes downhill from there. That is the real rub. So, this new arrangement gives Dish some breathing room, basically, and here is why.
There are two issues with “coverage.” That, defined by the FCC, and that defined to achieve customer satisfaction. And it is not just semantics. FCC coverage is loose. It is a broad stroke that just means coverage is available, even if it is slow and spotty. The satisfaction coverage is a completely different animal. It means that coverage is ubiquitous, i.e., residences, enterprises, venues, open areas, dead spots, malls, parks, you name it. That is where Dish is looking ahead to the deadline of 2027 with some trepidation.
While this seems to have more honey than vinegar, it is by no means a slam dunk. And not all opinions are on the same page. An analyst or two makes note that accomplishing part of what Dish must do is somewhat difficult – the Partial Economic Areas (PEAs). The main issues with these tend to be geography (not so much) and RoI (much). There are challenges with the infrastructure as well (power, backhaul, terrain, etc.). This will be the make or break for Dish under the agreements and the FCC’s watchful eye.
Now, Dish has more flexibility and time for implementing its own buildout. Even after it meets all of its FCC commitments, it has some work to do to fully blanket the nation with its own network coverage. Now they can rely on the T-Mobile MVNO deal as a safety net for a few more years while it builds out its own network and meet the customer requirement of fully blanketing the country with its own network.
Additionally, there is speculation that that the deal also was some insurance for AT&T’s DirecTV satellite TV business.
That makes some sense as well. After years of the satellite industry showing little growth and promise, the recent uptick of Non-geostationary Orbit (NGSO, the latest term for LEO satellites) is breathing new life into the satellite business. Even the GSO satellite business (where Dish has its birds) is seeing some resurgence. This gives Dish another content source, if that is something they are thinking about, going forward and such a vector fits into the MVNO landscape at some point.
In the end, it is a good deal for AT&T, not so good for T-Mobile, and a win for Dish. The reasons have been analyzed to death, with all kinds of theories as to why the players did what they did. Several analysts have analyzed the financial implications. Others the motives of Dish, AT&T, and T-Mobile. But when it comes down to counting the chips it is all about keeping as many of them as they can and keeping the revenue stream, wherever it is, running. It will be interesting to watch how this plays out in the next few years.
Ernest Worthman is an executive editor with AGL Media Group.
Dish Network, which is constructing a 5G wireless communications network of its own, has signed a long-term strategic network services agreement with AT&T that makes AT&T its primary network partner for its mobile virtual network operator customers. Dish disclosed the agreement this morning, and the price of shares in AT&T fell more than 2 percent on the news, with Dish losing 1.5 percent.
“Through this agreement, Dish will provide current and future customers of its retail wireless brands, including Boost Mobile, Ting Mobile and Republic Wireless, access to best-in-class coverage and connectivity on AT&T’s wireless network, in addition to the new Dish 5G network,” a statement from Dish reads. “The agreement accelerates Dish’s expansion of retail wireless distribution to rural markets where Dish provides satellite TV services. AT&T is also providing transport and roaming services as part of the agreement, to support Dish’s 5G network.”
Dish is committed to providing competition in the wireless market as the nation’s fourth facilities-based carrier, according to the statement, which said that the company will continue to build out the nation’s first cloud-native, OpenRAN-based 5G network reaching over 70 percent of the population by 2023.
“Teaming with AT&T on this long-term partnership will allow us to better compete in the retail wireless market and quickly respond to changes in our customers’ evolving connectivity needs as we build our own first-of-its kind 5G network,” said John Swieringa, Dish chief operating officer and group president of retail wireless. “The agreement provides enhanced coverage and service for our Boost, Ting and Republic customers, giving them access to the best connectivity on the market today via voice, messaging, data and nationwide roaming on AT&T’s vast network, as well as Dish’s 5G network.”
According to Dish, AT&T has been recognized as the Nation’s Best Wireless Network two years in a row, according to America’s biggest test. Dish cited AT&T 4G LTE as receiving the best network designation from GWS OneScore 2020. GWS conducts drive tests for AT&T and uses the data in its OneScore analysis, according to Dish.
“Fast, reliable and secure, AT&T 5G is available to 250 million people across the country over sub-6-GHz spectrum and millimeter-wave spectrum (AT&T 5G+), which is available in parts of 38 cities and at more than 20 venues, including high-traffic places like stadiums, arenas, airports and campuses,” the Dish statement reads. “AT&T plans to cover 200 million people across the country with C-band (mid-band) 5G by the end of 2023.”
Dish said that for many years, AT&T has been a leader in connectivity. Between 2016 and the end of the first quarter 2021, AT&T has invested more than $140 billion into its wireless and wireline networks, including capital investments and acquisitions of wireless spectrum and operations, to support market demand for communications, Dish said. The agreement allows AT&T the opportunity to use a portion of Dish’s spectrum in various markets to help support Dish customers on AT&T’s network, the statement from Dish added.
“Teaming with Dish on this agreement is not only a testament to the strength of our network, but it further validates the investments we’ve made in our fiber and wireless infrastructure,” said Thaddeus Arroyo, CEO of AT&T Consumer. “We welcome Dish wireless and its customers to the nation’s largest and best wireless network for all of their streaming, data and roaming needs.”
A senior analyst at data and analytics company GlobalData, Tammy Parker, said that the deal would be highly beneficial to AT&T, because the company not only would gain at least $5 billion in revenue from new mobile virtual network subscribers during the term of the 10-year agreement, it also would have access to Dish’s spectrum holdings to support Dish customers on the AT&T network. The network services agreement is not exclusive for either party, so both can go out and find new dance partners, as she put it; however, given the depth and breadth of this agreement, that would appear both unlikely and unnecessary.
“Both companies are poised to ride the U.S. wireless industry’s ongoing growth wave,” Parker said. “This is increasingly driven by the rollout of 5G, which enables faster network speeds, lower latency and new use cases, including internet-of-things services, that will result in many users having multiple wireless subscriptions. According to GlobalData’s latest forecasts, the number of unique mobile users in the United States will increase by 5 percent over the next five years. Furthermore, total mobile subscriptions in the United States will expand by more than 30 percent during that time, and there will be nearly 692.6 million U.S. mobile subscriptions by year-end 2026.
Parker said that a fascinating part of this new arrangement is that it provides a glimpse into AT&T’s concerns regarding the possibility that Dish could sell out to another entity, perhaps even Amazon or Google. Rumors have abounded, even before Dish agreed to build its 5G network on Amazon Web Services’ (AWS) cloud platform, about possible negotiations between Amazon and Dish regarding the former’s potential use of Dish’s forthcoming 5G network to offer new services, Parker said.
“Although there is nothing new to report there, this network services agreement stipulates that AT&T will be allowed to terminate the agreement in the event of a qualifying change of control of Dish,” Parker said. “This could include a rival wireless provider, U.S. cable company or ‘certain large technology companies’ taking over 50 percent more of the voting power or economic value of Dish. AT&T would still have to support Dish’s mobile virtual network operator customers for up to two years after such a termination.”
T-Mobile, with its Sprint network, is the primary mobile virtual network operator partner for Boost and Republic, Parker explained. Ting operates on every nationwide network except AT&T, she said; however, although Dish’s involvement saved T-Mobile’s acquisition of Sprint, the relationship between Dish and T-Mobile appears to have been fraught from the start.
“T-Mobile’s plans to shutter its 3G network by January 2022, leaving many of Dish’s customers without network service, has created an especially contentious standoff between the two companies, which likely helped pave the way for Dish’s new agreement with AT&T,” Parker said.
Craig Moffett and Nick Del Deo of MoffettNathanson Research published a blog post in which they expressed their analysis of the agreement between Dish and AT&T.
“AT&T has all but assured Dish’s survival, and as a much more disruptive and dangerous competitor than would otherwise have been the case,” the post reads. “AT&T has been signaling recently that they want more wholesale business when they can get it, so perhaps we shouldn’t be surprised. They clearly decided that the short-term gain of additional wholesale revenue was worth that risk. But they’d be well advised to be careful what they wish for. We see their decision to extend this deal to Dish as a catastrophically bad one. Dish and its investors should thank their lucky stars for AT&T’s strategic blunder.”
About Dish Network
Background information supplied by Dish describes the company as a connectivity company. “Since 1980, it has served as a disruptive force, driving innovation and value on behalf of consumers,” the information reads. “Through its subsidiaries, the company provides television entertainment and award-winning technology to millions of customers with its satellite Dish TV and streaming Sling TV services. In 2020, the company became a nationwide U.S. wireless carrier through the acquisition of Boost Mobile. Dish continues to innovate in wireless, building the nation’s first virtualized, O-RAN 5G broadband network.”
Dish has previously announced MLAs with Crown Castle International, SBA Communications, Vertical Bridge, Harmoni Towers, Mobilitie, Parallel Infrastructure, Phoenix Tower International, Tillman Infrastructure, Tower Ventures and Vogue Towers.
Dave Mayo, Dish’s executive vice president of network development, said through the American Tower agreement the carrier may lease space on up to 20,000 American Tower communications sites to support its nationwide 5G network deployment.
“Our team has already developed colocation plans for American Tower sites across the country to bring a new generation of connectivity to Americans,” he said.
Under the agreement, cash lease payments from Dish to American Tower will commence in 2022 and grow over time as Dish’s network deployment progresses. In addition, Dish may lease shared generators from American Tower on select sites and will have the ability to use American Tower’s zoning, permitting and other pre-construction services.
“We look forward to this agreement evolving into a long-term, mutually beneficial strategic partnership,” said Steve Vondran, American Tower’s executive vice president and president, U.S. Tower Division. “We believe that our nationwide portfolio of communications sites is optimally positioned to continue to serve as the backbone of today’s critical mobile broadband networks while assuring a meaningful share of new leasing activity in the marketplace.”
Back in July 2019, Dish agreed to acquire Sprint’s prepaid businesses and customers, including Boost Mobile, Virgin Mobile and the Sprint-branded prepaid service, as a part of the merger agreement of Sprint and T-Mobile, which was under scrutiny by the U.S. Department of Justice. At that time, Dish also agreed to become a national facilities-based wireless carrier, deploy the nation’s first standalone 5G broadband network.
Dish Buys Republic Wireless
In a separate deal, Dish Network acquired Republic Wireless, an MVNO service operating on the T-Mobile network. Upon close, DISH will assume 200,000 customers, the Republic Wireless brand and other supporting assets.
After the acquisition closes, the existing Relay division of Republic Wireless will continue to operate as a standalone company and will become a wholesale customer on Dish’s 5G network. Relay provides communication and productivity solutions for frontline teams in hospitality, facilities management, manufacturing, healthcare and education, and will remain headquartered in Raleigh, NC.