Dish Network on Tuesday reported consolidated revenue of $3.46 billion for the first quarter, down 6 percent year over year, as the company continues to lose traditional pay TV customers.
Dish reported a net loss of about 94,000 pay TV customers, which was better than the year ago period decline of 143,000. The loss includes shedding 185,000 satellite subs, which wasn’t fully offset by the addition of 91,000 Sling TV customers. Sling TV additions were well below analysts’ forecast of 161,000 and have slowed significantly since the year ago period when Dish added 195,000.
The company ended March with 10.85 million Dish TV subscribers and 2.3 million Sling TV subscribers for a total of 13.15 million pay TV subscribers (down from 12.53 million in Q1 of 2017).
As MoffettNathanson analysts pointed out in a Tuesday research note, Sling TV subscriber metrics are not as important to Dish’s pay TV business as its satellite segment.
“These [Sling TV] subscribers have never been profitable, so whether Dish adds a lot or just a few, or beings to lose the ones it already has, simply doesn’t matter very much,” MoffettNathanson analysts wrote.
Net income totaled $368 million for the first quarter, compared to $376 million a year ago. Pay TV ARPU was $84.50, down from $86.55 in the first quarter of 2017.
Traditional satellite churn of 1.47 percent was a bright spot in Tuesday’s earnings report, and marked a further improvement from the 1.56 percent churn Dish reported in Q4.
Looming over Dish, however, is the upcoming network buildout deadline set by FCC for Dish’s AWS-4 spectrum, which the company hasn’t been able to find a suitable buyer for.
“It is becoming harder and harder to see how Dish Network could meet its build-out requirements (now just 22 months away) even if they started network construction tomorrow,” MoffettNathonson analysts wrote.
“Dish may soon, or may already, face a make or break choice; sell their AWS-4 spectrum, even if at a sharp discount, or face losing it altogether and getting nothing at all,” the analysts observed.
