Dish still losing customers but 5G build on track

Dish Network lost both mobile and TV customers in the first quarter of this year, as well as seeing revenue and earnings slide, but the firm is upbeat about its progress in rolling out its own 5G network.

The US operator saw its mobile customer base fall to 7.91 million by the end of March; that’s 81,000 losses during the quarter and about 290,000 fewer customers than it had at the same date last year. However, quarterly losses were significantly better than the 343,000 the company reported in Q1 last year, so that’s something to cheer.

The bulk of those customers use the T-Mobile US and AT&T networks, despite the fact that Dish launched its own 5G network in mid-2022. Or so we believe. The fact that the company is so cagey about traffic on its own network suggests there isn’t a lot of it.

Speaking on Dish’s results call on Monday, co-founder and chairman Charlie Ergen described the telco’s own network traffic as being “not a material amount yet,” and repeated previous comments about the lack of compatible devices playing its part in that slow growth. There are only five handsets compatible with Dish’s Band 70 spectrum, which forms a major part of its 5G holding, he said, while the telco’s wireless CEO John Swieringa added that more phones are coming, including the iPhone.

“We’re ramping this year,” Swieringa said of Dish’s own network usage.

Much has been made of the operator’s rollout targets, particularly its requirement to reach 20% of the population by the middle of last June, which looked a bit shaky for a while, and there’s another one looming. Next month it is required to reach 70%, and it’s sounding confident of achieving that.

“We’re well on our way to meeting the 70% with respect to the 600 megahertz licences,” said Dave Mayo, EVP of network development at Dish.

He added a bit more colour, noting that as of the end of Q1 Dish had begun construction on around 18,000 sites. It will need approximately 16,000 to meet the 70% target, all of which will have to be fully fibred up and powered, he explained.

Naturally, the network build is having an impact on Dish’s capital spending. The company doesn’t share detailed capex information, but its Q1 report reiterates a ballpark US$10 billion spending plan for 5G, including sums already spent starting in 2021, and shows that in general spending is likely to be higher for the remaining nine months of this year than it will be for 2024 as a whole, with 5G accounting for a sizeable proportion of outgoings.

Further, responding to analyst questions on the results call, company executives indicated that spending will fall once Dish has reached its June rollout targets.

Keeping spending in check is important, given the macro-economic situation and rising cost of capital, and is arguably particularly so for Dish, whose Q1 numbers look less-than stellar. Revenue was down by 8.5% to $3.96 billion, while net income almost halved to $233 million.

And it’s not only in the wireless business that Dish is losing customers. It shed well over half a million – 552,000, to be exact – pay TV customers in the three months to the end of March, more than the 462,000 it lost in the year-ago quarter, leaving it with 9.2 million, including just over 2 million Sling TV streaming customers.

Its pay TV ARPU is actually on the up, but Dish surely needs to do something to stem those customer losses before it can start to build for growth.

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