23,000 leave in 3Q, but Dish stands pat

Dish Network Corp. lost 23,000 TV customers in the third quarter, almost double the losses from a year earlier, causing revenue to miss analysts’ estimates and putting pressure on Chairman Charlie Ergen’s next move for the company.

So far, Ergen is staying put and showing no signs of urgency. He told analysts during a conference call Monday that he’s less likely to do any deals this year and remains undecided about whether Dish will participate in the next spectrum auction.

With satellite- TV subscriber defections and growing challenges from cheaper online- streaming alternatives, the billionaire eventually needs to decide what to do with his $ 50 billion supply of airwaves. U. S. regulators ruled in August he couldn’t buy some on the cheap, nudging his goal of building a nationwide wireless carrier further out of reach. Last month, Dish forfeited $ 3.3 billion of those airwaves, and now faces a January deadline to file an application with the Federal Communications Commission to participate in another auction.

Dish is looking at the complexities of the FCC auction scheduled for March, and isn’t sure it will bid, Ergen said during the call. Among the uncertainties that bidders like Dish face is that some of the airwaves available will have varying degrees of interference, he said. So far, T- Mobile US Inc. and AT& T Inc. have said they would participate. Sprint Corp. isn’t bidding and Verizon Communications Inc. said last month it is reviewing the rules and has no great need to take part.

As for deals and possibly splitting up the company to put his stockpile of airwaves to use, the “odds are greater” that Dish makes no move before January, Ergen said. The company has been patient and will continue to be, he said.

“From a management perspective, we only have five rules, but one of them is to think long term,” Ergen said.

One reason Dish can take its time is that it holds a lot of airwaves that can help relieve network congestion as more people watch videos on phones. Companies such as Verizon would be “strategically committing malpractice” if they don’t look at Dish’s spectrum, Ergen said.

“Real estate is important and spectrum is real estate,” he said. “We are well positioned.”

With his satellite- TV business slowing, Ergen created Sling TV to compete against a crowded field of more- established players such as Netflix Inc., Hulu and Amazon. com Inc.

Dish included Sling TV subscribers in its pay- TV count when it reported earnings Monday, though didn’t break out the number, according to a statement. The service debuted in February featuring a 20- channel basic selection that starts at $ 20 a month. Because Sling TV is a lot cheaper than traditional packages, each customer brings in less than half the revenue of Dish’s satellite subscribers.

Sling TV user growth helped offset satellite losses, Craig Moffett, an analyst at Moffett-Nathanson LLC, wrote in an updated note Monday. The service added about 155,000 subscribers in the third quarter, almost triple the 56,000 gained in the second period, according to Moffett’s estimates.

By Moffett’s calculation, excluding Sling TV gains, Dish lost 178,000 satellite customers. That’s dramatically worse than the 12,000 loss from a year earlier, and leaves Dish’s traditional subscriber base shrinking at a 3.7 percent annual rate, Moffett wrote.

Dish’s sales of $ 3.73 billion last quarter fell short of the $ 3.79 billion average of analysts’ predictions compiled by Bloomberg. The average TV bill was $ 86.33, compared with $ 84.39 a year earlier. Analysts projected $ 88.10.

Dish shares fell 1 percent Monday to close at $ 63.09 in New York. The stock has dropped 13 percent this year, also hurt by scuttled talks to merge with No. 3 wireless carrier T- Mobile. Dish climbed 26 percent last year.