Dish Network (NASDAQ:DISH) reported its fourth-quarter earnings on Wednesday. The company also provided more updates on its wireless business including the cost estimate for wireless projects in 2020.
Here are the three key takeaways from Dish’s earnings report.
Dish’s earnings beat the estimates
Dish reported revenue of $3.24 billion—down from $3.31 billion a year ago but above the consensus estimate at $3.15 billion. The company posted an EPS of $0.60—down from $0.64 a year ago but above the consensus estimate at $0.59.
Dish’s revenue has fallen in recent years, which reflects pay-TV companies’ struggle amid cord-cutting. US households are ditching traditional pay-TV subscriptions, which shrinks the market for providers like Dish. Comcast (NASDAQ:CMCSA), Charter Communications (NASDAQ:CHTR), and Altice USA (NYSE:ATUS) have also been impacted by cord-cutting.
Sling TV sheds subscribers
Dish’s earnings report showed that its Internet television service Sling TV marked its fifth anniversary on a low note. Sling lost 94,000 subscribers in the fourth quarter. In contrast, the service added more than 200,000 subscribers in the previous quarter. The service’s subscriber base has fallen to 2.6 million from 2.7 million in the previous quarter.
Sling launched in February 2015 and it has been an important growth engine for Dish. In the third quarter of 2019, for instance, Dish’s legacy satellite television service shed 66,000 customers. However, Sling more than made up for the loss after adding 214,000 subscribers in that period.
Sling’s subscriber loss comes shortly after it hiked its prices following a similar action by its rival Hulu. Sling and other services face high operating costs, especially as they bulk their programming. Sony shut down its PlayStation Vue video service last month after its price hike didn’t work.
Dish forecasts up to $500 million in spending on wireless projects
Dish has moved a step closer to its longtime dream of becoming a wireless provider. A US federal judge cleared T-Mobile and Sprint (NYSE:S) to proceed with their merger. Notably, the merger will allow Dish to jumpstart its wireless venture with the assets that the companies divest.
Dish’s earnings show that it forecasts $250 million–$500 million in spending on wireless projects in 2020. However, the company will require about $15 billion to fully build its wireless business. The amount includes $5.0 billion that it will spend on purchasing the assets that T-Mobile and Sprint will divest. Then the company will need $10 billion to build a nationwide 5G network to underpin its wireless business.