Dish Sinks After Giving Little Hope of Finding Network Partners
(Bloomberg) -- Dish Network Corp. suffered its worst stock decline in more than a year after Chairman Charlie Ergen told investors not to expect any imminent network partnerships, sparking concerns about the company’s long-term strategy.
Dish is sitting on a trove of airwaves that could be used to build a wireless network, but the company has said repeatedly that it will need industry partners to capitalize on its assets. For now, a coalition doesn’t seem to be forming.
“I don’t think you should expect announcements on partnerships and anchor tenants,” Ergen, Dish’s co-founder, said on a conference call Tuesday.
Dish, which makes most of its money as a satellite broadcaster, has laid out plans for a second act as a wireless player. The idea is to create a vast new network that can deliver video, providing an alternative to conventional TV. He’s acquired airwaves worth as much as $40 billion to deliver on that goal.
But finding a partner has been key to that strategy. The pressure began to mount last month, when Sprint Corp. and T-Mobile US Inc. announced plans to merge. That means there could be fewer potential companies to team up with.
Dish also is up against a 2020 deadline to start using its airwaves. Otherwise, it faces use-it-or-lose-it rules for the assets.
Investors were hoping for reassurances that Ergen is making progress, especially as Dish continues to lose satellite-TV customers. Disappointed, they sent down the shares down as much as 8.1 percent to $31.15, marking the worst intraday drop since January 2017.
But even as he failed to give details on potential partnerships, Ergen reiterated that the company doesn’t plan to go it alone.
“We have said all along that we think we need strategic partnerships to achieve our goals,” he said. “We won’t be successful as a lone wolf out there. We’re not that good.”
©2018 Bloomberg L.P.