Dish Network desperate to raise money to meet 5G deadline, source says

[navychop]

Again, I believe their goal is the commercial and data market. Providing Internet connections to vehicles, etc.

 

[dishdude]

Again, I believe their goal is the commercial and data market. Providing Internet connections to vehicles, etc.

Why would they not want to tap the consumer market? Even if they don't want to sell direct to the consumer, they can sell data through MVNOs. They need to get some additional cash flow, quick.

 

[Yespage]

We knew they would meet that one. It is the 75% they have to have covered in Rural areas in 2025 that is the deadline they need money to meet. I have my doubts that they will meet it. I don' think that being the 4th cell phone provider using pre paid phones was the way to go. But I could be wrong and Charlie pulls it out again. Who knows.

I think they needed to start somewhere, and they needed something that'd work immediately. We'll see if this busts or Ergen needs to abandon and sell everything. But again, in 2013 no one would have guessed Dish would even be in the cell market. So, we'll see how Ergen manages.

 

[nelson61]

Refinancing or paying off the debt is not the problem.
The problem is he does not want to give up being "the decider".
Whomever bails it out would want decison making control in return.

 

[Bruce]

A possible DTV merger could help because of the customer base doubling, but there would be an insane amount of headache that I don't think Charlie would want to take on at this point. Partnership with Amazon is still the most likely road IMO.

This is from AT&T‘s CFO concerning a merger between the two Sat. companies (not happening).

Asked about that scenario and whether DirecTV could become a Dish buyer, the AT&T exec replied: “We separated from our satellite platform, and we have it in a construct where it’s been optimized by our partners at TPG. They do a really good job in optimizing that asset.”

Desroches added that AT&T has a good handle on upcoming equity cash flows from the DirecTV asset under TPG’s stewardship. “Before they would decide to do something with another party, whether it be Dish or somebody else, I think there is a fairly well-defined bar that we have,” the exec said. “Last year, it produced $4.5 billion for us. This year, we got it at around $3.5 billion. We have really good line of sight over the next several years as to what cash flows will come out of that business. And whatever we would do would have to be incrementally much better than that.” (AT&T uses the standalone DirecTV entity to help pay down debt.)

Concluded the AT&T exec: “So right now, we are in a really good position with the asset. Would we look at other opportunities? We always do, that’s our job. But the bar would be pretty high in order to do something to try to accelerate more value creation.”

So basically, they want a lot of money from Dish ( or anyone else) for a sell/merger, if not they will continue to bleed DirecTV dry to help pay down AT&T’s debt ($123 Billion).

By the way, profits for DirecTV shrank a billion dollars in just one year.

https://www.hollywoodreporter.com/business/business-news/directv-dish-att-4121159/

 

[Yespage]

Ergen needs more investment, not more debt. The idea of Ergen paying any premium for Directv is nothing short of comedy. Short of free, I'm not certain Dish would jump at it. The Cashflow simply doesn't exist.

 

[Bruce]

Ergen needs more investment, not more debt. The idea of Ergen paying any premium for Directv is nothing short of comedy. Short of free, I'm not certain Dish would jump at it. The Cashflow simply doesn't exist.

I agree, at the rate DirecTV is losing subscribers, I honestly believe Dish can outlast them and pick it up for peanuts.

But Dish needs money to outlast them, Dish with all their spectrum is a more attractive target , but no one to loan to them, my guess is there are some vultures out there waiting to pick up pieces of Dish for peanuts,

 

[nelson61]

I dug out the Directv section from AT&T's last 3 month 10k.

You can see what the boss was talking about when he said he is happy and not looking to get rid of his share.
After they performed radical surgery with writedowns, they now have around 2 billion invested in the spin off.
And it spits out cash like a slot machine stuck on WINNER.



NOTE 10. TRANSACTIONS WITH DIRECTV

We account for our investment in DIRECTV under the equity method and record our share of DIRECTV earnings as equity in net income of affiliates, with DIRECTV considered a related party.

Our share of DIRECTV’s earnings included in equity in net income of affiliates was $534 and $522 for the three months ended March 31, 2023 and 2022, respectively. Cash distributions from DIRECTV for the first three months of 2023 totaled $1,308, with $534 classified as operating activities and $774 classified as investing activities in our consolidated statement of cash flows versus total cash distributions of $1,837 ($522 operating and $1,315 investing) in the comparable prior period. Our investment in DIRECTV at March 31, 2023 was $2,142.

During the first three months of 2023, we repaid all outstanding notes payable to DIRECTV.

We provide DIRECTV with network transport for U-verse products and sales services under commercial arrangements for up to five years. Under separate transition services agreements, we provide DIRECTV certain operational support, including servicing of certain of their customer receivables for up to three years. For the three months ended March 31, 2023, we billed DIRECTV approximately $240 for these costs, which were recorded as a reduction to the operations and support expenses incurred and resulted in net retained costs to AT&T of $169 in the first quarter of 2023.

At March 31, 2023, we had accounts receivable from DIRECTV of $320 and accounts payable to DIRECTV of $80.

We are not committed, implicitly or explicitly to provide financial or other support, other than as noted above, as our involvement with DIRECTV is limited to the carrying amount of the assets and liabilities recognized on our balance sheet.

 

[navychop]

Is the band playing on deck?

 

[Bruce]

Did not want to start a new thread, this kinda fits in this one-

After almost a decade of effort, Dish Network may have finally run out of legal options in its pursuit of roughly $3.3 billion worth of AWS-3 spectrum.

According to the financial analysts at New Street Research, the Supreme Court decided not to review an appeal by Dish on the topic. "The Supreme Court denied the ... petition by Dish," the analysts wrote in a note to investors Friday, "effectively ending Dish's effort to gain control of spectrum that was auctioned in 2014."

At issue are $515 million in fines and 197 AWS-3 spectrum licenses worth around $3.3 billion. Two bidding entities called Northstar Wireless and SNR Wireless bought $13.3 billion worth of AWS-3 spectrum in the FCC's 2014 auction. SNR and Northstar initially qualified as "designated entities," or DEs, which made them eligible for a 25% discount intended for small businesses.

After the auction ended, the FCC ruled that the two DEs should not receive that discount because they were too close to Dish financially. As a result of the FCC's decision, Dish paid a $515 million fine and relinquished AWS-3 spectrum licenses worth around $3.3 billion.

https://www.lightreading.com/open-r...-3-spectrum-may-finally-be-over/d/d-id/785499

 

[MikeD-C05]

Things don't look good for DISH and this build out they have to have done in the next two years. Steadily losing subs and revenue now and that cuts into the money they could use to finish their towers. The only thing I can see them doing is to ask the FCC to give them more time to finish. But there is no guarantee they will do that.

 

[nelson61]

Things don't look good for DISH and this build out they have to have done in the next two years. Steadily losing subs and revenue now and that cuts into the money they could use to finish their towers. The only thing I can see them doing is to ask the FCC to give them more time to finish. But there is no guarantee they will do that.

The FCC wants another competitor for the existing wireless providers and will bend a lot to get it. 70 percent of the Dish wireless market has some kind of availability (but few customers).
Some company will continue developing it but it may not be Dish if they lose it in bankrupcy or sell it off to cover their debts.

My guess is the Dish team is spending their spare time practicing their Arabic language skills so they can communicate with their probable financial rescuers.

 

[nelson61]

Excerpt from Bloomberg today.

Dish Network Corp. will start selling its premium wireless service on Amazon.com Inc. later this week, according to a person familiar with the plan.

Boost Infinite, the first postpaid mobile service from Dish, offers unlimited access for $25 a month. Dish shares jumped in extended trading on the news.

Dish’s unlimited wireless service made its debut in June, but the retail partnership with Amazon has been in the works for months. Lacking its own chain of stores, Dish has been selling Boost Infinite online and could benefit from broader exposure on Amazon.

The move builds on Amazon’s role as a key partner to Dish. Two years ago, the telecom company enlisted Amazon Web Services cloud software and equipment to run core elements of its 5G network under development.

Amazon already sells SIM cards for Dish’s Boost Mobile prepaid service along with plans from Mint Mobile, which agreed to be acquired by T-Mobile US Inc., and Tracfone, which Verizon Communications Inc. purchased last year, as well as smartphones. The possibility of a retail agreement between Amazon and Dish was first reported by the Wall Street Journal.-----------------------------

 

[Yespage]

I've been happy with Boost Infinite. I have had trouble though in some buildings getting signal, sometimes small buildings, sometimes larger ones, but it isn't always consistent. Dish needs to start getting some income from this. Could help get people to loan him money.

 

[Bruce]

I've been happy with Boost Infinite. I have had trouble though in some buildings getting signal, sometimes small buildings, sometimes larger ones, but it isn't always consistent. Dish needs to start getting some income from this. Could help get people to loan him money.

Just to make $1.2 Billion more ( and they need a lot more) this year, at $25 per month, they need 4 Million new customers, in 2020, Boost had 9 Million, Q1 2023, reported at 7.9 million.

 

[Yespage]

They don't need to make it all, it would be a manner of showing "this is profitable, now please give us cash".

 

[Bruce]

They don't need to make it all, it would be a manner of showing "this is profitable, now please give us cash".

True, but they would need a lot to convince the Banks, specially to offset the losses of Dish/Sling TV.

This is such a bad time to ask for money, rates are high, bond markets are ******, main reasons why we do not see many mergers, except for the ones where the companies have a lot of cash.

Remember, when AT&T bought/merged with DirecTV and Warner, Comcast with Universal, Disney and Fox, rates were extremely low and tons of cash was out there, it was even easy for Sinclair to purchase Fox Sports for $10 Billion in a deal even back then was thought not to be good.

If this was just 4 years ago, Dish would not have any issues raising the funds.

 

[navychop]

the losses of Dish

Dish is still profitable and will be for at least a few more years.

 

[Bruce]

Dish is still profitable and will be for at least a few more years.

Nothing to do with it, Banks, especially today, want to see growth, after the $10 Billion bath they are taking on the Sinclair/Diamond/Bally deal, a deal that went bad partly because of a loss in subscribers, both in Providers (Dish and others) dropping them and cord cutting.

If Dish did not have this 5G albatross , I honestly believe they would be fine and easily could have outlasted DirecTV.and picked them up cheap in a merger/sale.

 

[dishdude]

Some details on the Dish/Amazon/Boost offer. $25/mo for 30GB of data. Keep in mind this is a low cost MVNO so deprioritization on the network will be an issue for users.

https://www.engadget.com/amazon-pri...d-for-new-boost-infinite-plans-120058552.html