DISH Network (DISH) - 2020 Q4 - Annual Report

Subscriber Base - As of December 31, 2020, DISH Network had 11.290 million Pay-TV subscribers, including 8.816 million DISH TV subscribers and 2.474 million SLING TV subscribers[18]. - The retail wireless segment had 9.055 million subscribers as of December 31, 2020, following the Boost Mobile Acquisition which added over 9 million subscribers and the Ting Mobile Acquisition which added over 200,000 subscribers[19]. - DISH Network's SLING TV services are marketed as lower-cost alternatives to traditional pay-TV, requiring an Internet connection and available on multiple devices[37]. Acquisitions and Investments - The Boost Mobile Acquisition was completed for an aggregate purchase price of $1.4 billion, effective July 1, 2020[23]. - The Ting Mobile Acquisition was completed on August 1, 2020, acquiring over 200,000 subscribers[28]. - DISH Network has invested over $21 billion in wireless spectrum licenses and related assets, including over $11 billion directly for licenses and over $10 billion in non-controlling investments[21]. - The company has made over $10 billion in non-controlling investments in Northstar and SNR entities related to AWS-3 wireless spectrum licenses[57]. Wireless Network Development - DISH Network aims to commercialize its wireless spectrum licenses through the development of the first cloud-native, Open Radio Access Network (O-RAN) based 5G network[21]. - The company plans to spend approximately $10 billion on its 5G Network Deployment, excluding capitalized interest[55]. - The company has entered into a long-term agreement with Crown Castle to lease space on up to 20,000 communication towers as part of its network deployment strategy[55]. - The company operates as an MVNO while building its 5G network, relying on T-Mobile for network services under the MNSA[46]. Competitive Landscape - The company faces intense competition from both traditional pay-TV providers and new entrants in the streaming market, including Netflix, Hulu, and Amazon[44]. - The retail wireless market is characterized by intense competition from larger national carriers like Verizon, AT&T, and T-Mobile, which poses challenges for subscriber acquisition and retention[52]. - The company faces intense competition in the Pay-TV sector, with increasing competition from broadband and wireless service providers, impacting subscriber acquisition and retention[149]. - The wireless services industry is highly competitive, with established players like Verizon and AT&T having greater resources, which may hinder DISH's ability to attract new subscribers[163]. Regulatory Challenges - The company faces significant government regulation and oversight, particularly from the FCC, which could impact its operations and financial condition[63]. - The FCC has proposed allowing "tweener" DBS operations, which could potentially cause harmful interference to the company's services and constrain future operations[77]. - The FCC's rules regarding public interest obligations require the company to set aside 4% of channel capacity for noncommercial programming, which could impact financial results[82]. - The FCC's consideration of extending cable exclusivity bans to DBS providers could adversely affect the company's ability to serve multiple dwelling units[98]. Financial Performance and Risks - The company’s revenue from both pay-TV and wireless services is vulnerable to economic weakness and uncertainty, particularly related to the COVID-19 pandemic[146]. - The cost of programming is the largest component of Pay-TV costs, and competitors with programming affiliations may secure lower costs or exclusive content, placing DISH at a disadvantage[169]. - Economic weakness may lead to fewer subscriber activations and increased churn rates, particularly among lower-tier programming package subscribers[180]. - Increased subscriber acquisition and retention costs are anticipated due to economic conditions, impacting profitability[185]. Operational Challenges - The COVID-19 pandemic has adversely affected the company's business, leading to reduced subscriber activations and increased churn rates due to social distancing measures[144]. - The company has experienced interruptions in its supply chain due to COVID-19, affecting its ability to meet build-out requirements for its wireless spectrum licenses[147]. - The company faces challenges in renewing programming contracts, which could negatively impact subscriber activations and churn rates[193]. - Cybersecurity risks pose a threat to the company's information technology systems, which could disrupt operations and harm subscriber trust[200]. Management and Leadership - The company had approximately 13,500 employees as of December 31, 2020, and is in negotiations with a union representing a small group of employees[122]. - The company believes its future success is dependent on retaining key executives, with potential adverse effects if key personnel are lost[120]. - The executive team includes Charles W. Ergen as Chairman, Paul W. Orban as CFO, and David A. Scott as Chief Human Resources Officer, among others[129]. - The company has a history of executive leadership stability, with key executives serving in their roles for several years, contributing to its strategic direction[127].