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Dish forecasts 10-year revenue growth

Shares in Dish Network were trading up today but were down compared to a week ago, when the FCC confirmed Dish’s compliance with its 5G buildout requirements.

The FCC’s September 29 letter was a positive one in Dish’s bid to be a viable fourth facilities-based wireless carrier. However, it came before the FCC announced its first satellite de-orbiting fine, which hit Dish with a penalty of $150,000 for failure to properly deorbit its EchoStar-7 satellite.

Last week, EchoStar filed an S-4 with the Securities and Exchange Commission (SEC), where it was revealed that Dish will be a subsidiary of EchoStar when the merger is finalized as opposed to the other way around.

In the filing, Dish’s management shared their estimates for revenues the next 10 years, including $18.27 billion in 2024, steadily increasing each year to $41.73 billion in 2033.

Q3/Q4 expectations

Analysts at TD Cowen expect Q3 wireless subscriber net additions of 33,000 for Dish, with the focus being on postpaid. In the third quarter, Dish started selling Boost Infinite on Amazon to Prime members.

“The platform will be imperative to Dish’s distribution efforts,” the Cowen analysts wrote. “However, it will be challenging for Dish to achieve meaningful traction through a purely digital sales channel. The company will therefore also need to build up Boost Infinite’s physical presence to achieve its subscriber targets.”

The distribution deal with Amazon could also signal a deeper relationship such as an eventual Dish/AWS merger or MNNO deal, they noted.

For now, “an Amazon/Dish wireless MVNO would be too early as Dish doesn’t yet have the robust 5G network that Amazon would require. However, after YE2023 when Dish reaches 70% 5G voice (VoNR) coverage, a deal could be done for a disruptive win-win,” the Cowen analysts said.

Dish’s launch of the iPhone 15 on its network was seen as a game-changer for the company; its $60/month plan offers $1,000 off the latest model and a new iPhone every year. The Cowen team expects subscriber growth to slowly materialize, with meaningful growth in early 2024.

Analysts at New Street Research (NSR) have pointed out that MVNO costs for Dish will fall as subscribers are transitioned to the Dish network. They expect Dish will deploy VoNR across the network by the end of the first quarter of 2024 and to put all iPhone 15s onto the Dish network in markets where VoNR is deployed.

NSR also assumes Dish is planning to invest heavily in iPhone volumes in the fourth quarter and notes that management’s forecast suggests that subscriber acquisition costs will increase by around $650 million in the second half of 2023, mostly in the fourth quarter.

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