Dish Slows Pay-TV Customer Losses as Shift to Wireless Begins

(Bloomberg) -- Dish Network Corp.’s pay-TV customer losses slowed dramatically last quarter, good news for a company that’s feuding with some of its biggest program suppliers, like HBO and Fox Sports, and plans to spend billions of dollars launching into mobile-phone service.

• The satellite TV distributor lost 31,000 customers in the second quarter, far fewer than the 227,000 analyst predicted and the least in the past year. The losses have been driven by cord cutting and contract disputes with programmers, including HBO, which has been absent from the service since November.

Key Insights

• The declining video business highlights the challenges the company faces and the rationale behind its planned transformation from a satellite-TV service into a national wireless carrier -- even one that’s far behind leaders AT&T Inc., Verizon Communications Inc. and the merging T-Mobile US Inc. and Sprint Corp. Smaller losses in pay TV mean fewer headaches during the transition.
• The company agreed last week to buy $5 billion in assets from T-Mobile and Sprint, including the Boost and Virgin prepaid businesses, and has a $21 billion cache of airwaves to build into a 5G network and compete with those larger competitors. The company will discuss its plans on a conference call at 4:30 p.m. New York time.
• The T-Mobile/Sprint deal still has a major hurdle to clear: A number of states are seeking to block the merger, saying it will result in higher prices for consumers.

Market Reaction

• Dish shares were little changed in extended trading Monday. The stock fell 3.1% to $38.28 at the close in New York.

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To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum

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