How Amazon Could End Up as DISH Network’s First Wireless Customer

Amazon could end up being DISH’s first wireless customer

Earlier this month, citing unknown sources, TVNewsCheck reported that DISH Network (DISH) and Amazon (AMZN) were in talks for Amazon to be DISH’s first customer when DISH launches its wireless network.

According to the report, it’s not clear whether Amazon intends to invest in DISH or its wireless business.

How Amazon Could End Up as DISH Network’s First Wireless Customer

Considering DISH Network’s continuing pay-TV subscriber losses, the company is increasingly looking at transitioning into a connectivity company. According to DISH, it believes that the wireless industry will continue to see consolidation. Last month, Dish ended up being the second-largest spectrum buyer at the FCC’s (Federal Communications Commission) 600 MHz (megahertz) auction, spending $6.2 billion.

Other major buyers at the broadcast spectrum auction included T-Mobile (TMUS), AT&T (T), and Comcast (CMCSA), which spent ~$8.0 billion, $910.2 million, and $1.7 billion, respectively.

DISH’s pay-TV subscriber losses could be fueling its entry into the wireless space

As the chart above indicates, in 1Q17, DISH’s subscriber losses rose. The company saw a loss of 143,000 pay-TV subscribers, compared to its loss of 23,000 subscribers in 1Q16.

The rising competition in the media industry has been one of the main reasons for DISH’s rising pay-TV subscriber losses. While streaming services such as Hulu are launching online television services, Alphabet’s (GOOG) YouTube is also entering the fray with YouTube TV.

Existing pay-TV operator Comcast is also innovating when it comes to its X1 set-top box. It’s following a market segmentation strategy for its triple play (video, voice, and high-speed Internet) services and offering deep discounts on its video services.