Lower churn helps Dish ride out Maria losses

Reuters News
Posted: Nov 09, 2017 6:24 AM

By Arjun Panchadar

(Reuters) - Dish Network Corp gained subscribers in the mainland United States in the third quarter and reduced the rate at which it lost existing customers, offsetting a hit to offshore business 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 storm.

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.

The satellite TV service provider also said it would bear the costs of re-connecting customers hit by the storms.

"Given the devastation and loss of power, substantially all customers in those areas were unable to receive DISH service as of September 30," the company said.

Dish shares rose 5.4 percent in early trading in New York, helped by subscriber gains in the 50 U.S. states and a handful of other positive signs from the results.

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

Its "churn" rate, or the percentage of subscribers who leave a service provider, fell to 1.57 pct, compared with 2.11 pct last year.

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, Dish in 2015 launched internet-based television service Sling TV for which it has said it is seeing demand beyond just younger consumers.

The company also faces intense competition in the traditional pay-TV market from AT&T Inc, Comcast Corp and Charter Communications Inc and has been buying up wireless airwaves, or spectrum, in recent years as its satellite business came under pressure.

Gross new pay-TV subscribers in the third quarter came in at about 638,000, compared with about 736,000 in the same period a year ago.


After the collapse of merger talks between T-Mobile and Sprint, analysts say 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)