Dish loses more wireless subscribers in Q1 although its 5G build out is on track
Dish continues to report net declines in wireless subscribers
To placate the FCC, which was worried about the reduction in the number of major carriers from four to three (a 25% reduction) Dish promised to replace Sprint as the nation’s fourth-largest carrier. While it builds out its 5G standalone network, Dish is a mobile virtual network operator (MVNO) which means it is buying wireless service wholesale from T-Mobile and AT&T and selling it to the public at retail prices.
Dish Wireless continued to lose subscribers during the first quarter
So far, Dish has been having problems keeping wireless subscribers. Dish Wireless started with the 9.3 million subscribers it obtained when it closed on the purchase of Sprint’s prepaid businesses. That deal gave Dish 7,500 retail stores and 400 employees. But since the deal closed, that customer count has been heading south. As recently as this past February, CEO Ergen admitted that it was his fault that the company was six months behind in its 5G build-out.
And by June 14th, 2023, Dish must cover at least 70% of the U.S. population with wireless service equal to or greater than 35 Mbps, verified by a drive test. It also needs to have at least 15,000 5G cell sites up and running by that date. If Dish fails to meet these figures in time, it will make a “voluntary contribution” to the U.S. Treasury for as much as $2.2 billion.
Dish says that its wireless build-out is still on track
After the earnings release, during Dish’s conference call, company President Erik Carlson did have some good news reporting that the build-out of the company’s wireless network is on track. The executive added that during the quarter, Dish settled all outstanding issues with T-Mobile on favorable terms. At issue was the earlier than expected closing of T-Mobile’s 3G CDMA service which negatively impacted the Boost Mobile customers that Dish acquired in the Sprint deal.
Carlson said during the conference call that the accelerated CDMA shutdown planned by T-Mobile negatively impacted Dish Wireless during the first quarter and hurt its ability to compete. Dish is waiting for approval from the DOJ before it can officially settle its disputes with T-Mobile which includes matters related to the CDMA shutdown. Dish remains optimistic that the DOJ will soon approve the settlement with T-Mobile.
Dish Network shares took a hit on Friday, declining $5.26 or 19.14% to $22.22.