Sling TV gains help Dish ride out Maria losses

A Dish Network satellite dish is shown on a residential home in Encinitas, California
A Dish Network satellite dish is shown on a residential home in Encinitas, California, U.S., November 8, 2017. REUTERS/Mike Blake

November 9, 2017

By Arjun Panchadar

(Reuters) – Dish Network Corp lost fewer-than-expected subscribers in the third quarter as its internet-based service Sling TV attracted more customers, offsetting a temporary hit from Hurricane Maria.

The U.S. satellite and internet TV provider said it wrote off monthly fees from around 145,000 subscribers in Puerto Rico and the U.S. Virgin Islands cut off by damage to infrastructure from the hurricane.

The lost subscriptions, which the company said should return as the islands get back on their feet, reduced third-quarter profit at the U.S. satellite TV service provider to 57 cents per share, below the average analyst estimates of 59 cents, according to Thomson Reuters I/B/E/S.

While the hurricane effects meant that overall pay-TV subscribers declined about 129,000 in the quarter, the company said it added about 16,000 net pay-TV subscribers in the mainland United States.

“This defies the trend seen thus far (at rival firms),” Barclays analysts said in a note on the results.

They said others in a sector that includes Charter Communications, Comcast and AT&T, had seen video losses accelerate in the third quarter due to competition from stripped down packages of services.

Analysts were expecting Dish to lose 155,000 subscribers, according to research firm FactSet StreetAccount.

Dish shares rose around 4 percent by midday in New York.

Dish, like other pay-TV providers, is battling a broader trend of cord-cutting, where consumers drop their TV packages for online streaming services such as Netflix Inc and Amazon.Com Inc’s Amazon Prime.

To counter the threat, the Colorado-based company in 2015 launched multi-channel internet offering Sling, for which it has said it is seeing demand beyond just younger consumers.

Evercore analysts estimated that Sling TV added between 224,000 and 264,000 video subscribers in the quarter, above Evercore’s forecast of 100,000.

Dish’s “churn” rate, or the percentage of subscribers who leave a service provider, fell to 1.57 percent, compared with 2.11 percent last year.

Gross new pay-TV subscribers still fell to 638,000 from 736,000 in the same period a year ago.

BROAD SPECTRUM

The company also faces intense competition in the traditional pay-TV market and has been buying up wireless airwaves, or spectrum, in recent years as its satellite business came under pressure.

After the collapse of merger talks between T-Mobile and Sprint, analysts said that Dish’s hoarding of spectrum assets makes it attractive to a telecom major.

J.P. Morgan analyst Philip Cusick said he believed the company would continue looking at M&A opportunities with traditional carriers and outside participants.

Moffett Nathanson analyst Craig Moffett was less impressed with the results.

“Yes its spectrum is still attractive. But only at a reasonable price,” he said. “And could Dish even consider selling its spectrum – say, to T-Mobile – for a reasonable price… to be left only with the satellite business?”

Net income attributable to Dish fell to $297 million, or 57 cents per share, in the three months ended Sept. 30 from $318 million, or 67 cents per share, a year earlier.

Revenue fell to $3.58 billion from $3.77 billion.

(Reporting by Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila and Patrick Graham)

  • Roy Beane

    A far cry from the 1950s when we only had maybe 2 channels to pick from, and half the time those didn’t always come in clear because of the vast distances and weather conditions in West Texas.

  • Martin Arredondo

    I have Sling now. I had Dish but when my contract was up I went to DirecTv because the suckered me in with the NFL package. Boy, what a mistake DirecTv is archaic compared to Dish’s programming guide and the On Demand shows were much better. DirecTv also didn’t have apps built in to their guide. The “kicker” DirecTv told me that they did have mobile TV but come to find out that, sure I had it, as long as I was in my own house under my own network. I only had a few channels that I could take everywhere with me mobile. I don’t watch TV that much anyway so after a year I canceled DirecTv (I paid my cancellation fees with the $200 visa they gave me) and got Sling for now and I’ve gone from over $100 per month to $25. I’m in the process of buying a house so as soon as I get my house I can assure you that I’ll likely get back with Dish. I’ve had cable, Fios, DirecTv and Dish all in the last few years and very surprisingly Dish to me was the best. I loved it and their customer service was great. Someone answered the phone promptly every time I called. And, no, I don’t work for Dish. Lol.

  • Doctor B

    I’ve been a happy Dish customer for 2 years. Especially with the Winegard Playmaker portable satellite dish. Pulls in everything perfectly while traveling in my RV.

  • wildfire1944

    I have been happy with dish. Been with them for years now. After the house burned they came in and replaced everything at no charge. Kept us going in the RV at a reduced rate. Reasonable price. What’s not to like?