DISH Network (DISH) - 2021 Q4 - Annual Report

Subscriber Metrics - As of December 31, 2021, DISH Network had 10.707 million Pay-TV subscribers, including 8.221 million DISH TV subscribers and 2.486 million SLING TV subscribers[29]. - The Retail Wireless segment had 8.546 million subscribers as of December 31, 2021, following acquisitions of Boost Mobile, Ting Mobile, and Republic Wireless[30]. Wireless Spectrum and Network Development - DISH Network has invested approximately $30 billion in wireless spectrum licenses and related investments, excluding $6 billion of capitalized interest[32]. - The company plans to deploy a 5G network capable of serving 20% of the U.S. population by June 2022 and 70% by June 2023, with over 50 markets currently under construction[69]. - DISH Network aims to commercialize its wireless spectrum licenses through the development of a cloud-native, Open Radio Access Network (O-RAN) based 5G network[32]. - The company has made substantial investments in wireless spectrum licenses and plans to commercialize these through the completion of its 5G Network Deployment[178]. Business Strategy and Customer Service - DISH Network's Pay-TV strategy focuses on providing the best technology, outstanding customer service, and great value to attract and retain subscribers[40]. - The company has made significant investments in customer service improvements and technology, including award-winning DVRs and a cloud-based DVR service[41]. - The retail wireless business strategy focuses on acquiring high-quality subscribers through competitive offers and innovative value-added services while retaining them with outstanding customer service[61]. - The company is investing in operational improvements to enhance subscriber satisfaction and reduce churn rates[202]. Competition and Market Challenges - Competition in the Pay-TV industry has intensified, with increased pressure from both traditional providers and online content distributors[56]. - The retail wireless market is characterized by intense competition from larger national carriers such as Verizon, AT&T, and T-Mobile, which poses challenges for subscriber acquisition and retention[66]. - The company faces intense competition in the Pay-TV sector, requiring increased spending on subscriber acquisition and retention[167]. - The competition from Internet-based video offerings is increasing, posing a threat to traditional Pay-TV services[169]. - The company faces increased competitive pressures from content providers and other companies distributing video directly to consumers over the Internet, which may limit future growth opportunities for DISH TV[174]. Regulatory Environment - The company is subject to significant government regulation, particularly from the FCC, which could impact its operations and business prospects[78]. - The company must comply with numerous FCC reporting and filing requirements, which could lead to the revocation or modification of its licenses[93]. - The FCC has proposed allowing "tweener" DBS operations, which could potentially cause harmful interference to the company's services[94]. - The FCC's program access conditions imposed on certain cable companies have expired, which could hinder the company's ability to obtain programming from Liberty Media Corporation and Charter[114]. - The FCC is considering redefining MVPD regulations to include Internet-based streaming services, which could impact the company's regulatory obligations[121]. Financial Performance and Costs - The cost of programming is the largest percentage of overall Pay-TV costs, and competitors with ownership of programming content may have a cost advantage[187]. - Increased programming costs are expected, particularly for local broadcast and sports programming, which may pressure margins[209]. - The rising costs of retransmission consent agreements may exceed the company's ability to increase subscriber prices, impacting financial performance[219]. - The average revenue per user (ARPU) for Pay-TV is negatively impacted by the increase in SLING TV subscribers, which purchase lower-priced programming services compared to DISH TV subscribers[172]. Operational Challenges - The company has incurred significant upfront costs to subsidize wireless devices offered under promotional pricing to consumers[65]. - Supply chain disruptions due to COVID-19 have led to delays in obtaining essential materials and equipment, affecting the 5G Network Deployment[163]. - The company is currently defending multiple patent infringement actions, which could lead to significant costs and impact its competitive position[137]. - The company is vulnerable to cyber-attacks and system failures, which could disrupt operations and harm subscriber retention[220]. Employee and Management - The company had approximately 14,500 employees as of December 31, 2021, and is focused on retaining skilled personnel for its wireless business[142]. - The executive team includes experienced leaders, such as W. Erik Carlson, who has been with the company for over two decades[148]. - The company has adopted a written code of ethics applicable to all directors and officers, ensuring compliance with regulatory standards[146]. Impact of COVID-19 - The COVID-19 pandemic has adversely impacted subscriber activations, with reduced in-person selling opportunities and a decline in willingness to engage with in-home services[161]. - The company has experienced a reduction in gross subscriber activations as a result of the pandemic and economic uncertainty[162]. - Economic weakness may lead to fewer subscriber activations and increased churn rates, particularly among lower-tier programming package subscribers[200].