Chairman exiting CEO role to focus on wireless effort
Satellite-TV firm, founded by Ergen, has acquired spectrum
Dish chairman and founder Charlie Ergen stepped down from his role as CEO on Tuesday to focus on the future of the Douglas County satellite-TV company: wireless communications.
The company has been acquiring wireless spectrum through government auctions for years, most recently spending $6.2 billion last spring for wireless airwaves. Since 2008, the company said it has spent or invested over $21 billion on wireless spectrum licenses and other investments.
But Dish has done very little with its wireless assets, which could be used to stream movies or offer cellphone service to customers. And it’s facing deadlines by the Federal Communications Commission to build something — or lose it. A block of 700 MHz licenses it bought in 2008, for example, faces a March 2020 deadline to provide service to 70 percent of the population in the license area, the company said in past regulatory filings.
Longtime Dish executive Erik Carlson becomes CEO and keeps his post as president.
Ergen hinted Tuesday that Dish is planning to make news soon.
“I have every confidence that under Erik’s leadership our new organizational structure will deliver value for Dish TV and Sling TV and will aid our entry into wireless,” Ergen said in a statement.
In March, Dish told the FCC that it planned to build a 5G-capable network for internet-of-things devices. Such a communication network would allow driverless cars to get wireless alerts of traffic accidents on their routes.
The 5G technology is faster mobile internet service, akin to home broadband speeds. It would offer the ability to watch a Denver Broncos game at the stadium while simultaneously watching a seatmate record the
game and broadcast it to Facebook, and then seeing the same game onscreen with no lag, explained Brian Goemmer, president of Allnet Insights & Analytics. Today, there would be a few-seconds delay on the small screen.
Goemmer said Dish’s ownership of wireless spectrum is on par with TMobile’s.
“Dish has enough spectrum to basically offer the same level of service that T-Mobile offers today,” Goemmer said. “The only thing they don’t have is a nationwide network.”
For Dish to get to that point, it would either need to build a bunch of cell towers across the U.S. or partner with existing mobile companies to lease space on their towers. Either way would take time, though teaming up with a company such as Verizon or T-Mobile would get Dish where it wants to go faster. Dish’s pitch to the FCC is more of a bike lane than highway based on the amount of spectrum it owns.
“They have enough spectrum for a five-lane highway to bring trucks and cars through, but they’re building a little bike path to meet the obligation of the FCC,” Goemmer said.
Marci Ryvicker, a Wells Fargo analyst, shared the note she wrote to clients that says the changes make sense. She called the news “more housekeeping than anything else.”
“We really don’t think this suggests any strategic change in the business, but rather highlights Charlie’s commitment to the 5G-like/capable network,” Ryvicker wrote.
The management changes comes six years after Ergen stepped down as CEO in 2011 to focus on integrating acquisitions, leaving the top job to Joe Clayton, the former Sirius Satellite Radio CEO. But Ergen returned as CEO three years later following Clayton’s retirement in March 2015.
Ergen, who cofounded Dish in 1980, isn’t the largest owner of the publicly traded shares. After institutional investors, Ergen is Dish’s 16th-largest shareholder. But he owns unlisted Dish shares that have a 10-to-1 voting power, giving Ergen 78.5 percent of the voting power of Dish Network as of Nov. 29, according to a regulatory filing. He can convert those unlisted shares to public shares, a deterrent against a hostile takeover of the company.
Other job changes at Dish included:
• Warren Schlichting is now group president, Sling TV. His former title was Dish’s executive vice president for marketing, programming and media sales, and Schlichting will still oversee Dish’s media sales and programming departments.
• Brian Neylon becomes group president, DISH TV. Neylon was formerly EVP of customer acquisition and retention and retains oversight of those departments.
• John Swieringa, succeeds Carlson as chief operating officer.
• David Scott, a 20-year veteran of Walmart, joins Dish in February as its chief human resources officer.