The DISH Network Corporation held their Q3 2023 Earnings Conference Call, with Tim Messner, EVP and General Counsel, leading the call. He was joined by other executives such as Charlie Ergen, John Swieringa, Paul Orban, Tom Cullen, Mike Kelly, and Gary Schanman. They reminded listeners of their Safe Harbors and mentioned that they may make forward-looking statements. They also stated that they have no prepared remarks and will open the call to questions from analysts. The first question was from Walter Piecyk, but there was no response, so they moved on to the next question from Michael Rollins, who asked about the retail results for wireless in the quarter and the subscriber and EBITDA burn, specifically mentioning the Boost Infinite component. Mike Kelly then responded to the question.

The speaker discusses the Boost wireless side and mentions the discipline brought back into the sales channel resulting in fewer net ads. They also focused on providing 5G-capable devices to customers and realigned dealer compensation for acquiring profitable customers. The EBITDA for the quarter was higher due to elevated marketing costs and higher equipment COGS. The current base of Boost subscribers is generating revenue, but it may not be enough to fund subscriber acquisition for new Boost Infinite opportunities. The CDMA shut off had a negative impact on the expected growth.

The speaker discusses how they missed a cycle in the past, resulting in a large number of customers without compatible phones. They mention the importance of holding T-Mobile accountable and making changes to improve customer retention and performance. A question is then posed about the postpaid business.

The speaker is asking about the company's plans for advertising and decreasing capital expenditures. They mention the need to increase awareness of the service and ask how much flexibility the company has in terms of advertising spending and cutting capital expenditures. The company responds by saying they have a good relationship with Amazon and are working on improving the storefront presentation. They also mention that they expect a decrease in capital expenditures and have flexibility in this area. The speaker asks for more details on how low the company can go in terms of cutting capital expenditures to use those funds for advertising the service. The company does not provide a specific answer but mentions that they expect a decrease in capital expenditures going into 2024.

The speaker acknowledges that their marketing efforts have not been successful and provides examples of how Boost is not easily accessible through Apple and other retailers. However, they believe that focusing on improving the online purchasing experience will lead to greater success, despite some operational issues that still need to be addressed. The decision to launch during the release of the iPhone was necessary to stay competitive.

In this paragraph, the speaker discusses the current state of their company and acknowledges that they may be making more mistakes than they would like, but they are failing fast and learning from their mistakes. They recognize the need for improvement in their marketing and messaging strategies and are working with partners to achieve this. The speaker also mentions a recent sale in Puerto Rico, which will bring in capital and reduce their CapEx expenses. They are unable to give guidance on total CapEx for next year, but are focusing on managing their cash through various means.

The company is focused on marketing and acquiring customers, and the speed at which they do so depends on the profitability of the customers. They have met a major milestone and will continue to invest in their network. The company is not opposed to subsidizing phones, but they have their own owner economics and their variable cost for customers is 0. The company expects CapEx to decline for the rest of the year and into 2024 before seeing an uptick in the first half of 2025. The allocation of capital will depend on the company's performance.

The company is looking at various opportunities for growth as they transition to their new network. John Swieringa, the President and Chief Operating Officer, is focused on a 3-legged approach to achieve full M&O economics in their retail business. This includes expanding their commercial VoNR ops and increasing device compatibility. As a result, they expect to see a significant impact on their economics and a reduction in their MVNO bill.

The speaker discusses the projections for the company's wireless division, which show an increase in losses in the fourth quarter due to higher costs. However, they believe the forecast provided in the S-4 filing is still accurate and they will continue to deploy more towers, which will increase operating expenses. Overall, they expect profitability to improve in the coming year.

In this paragraph, Kannan Venkateshwar asks Charlie Ergen about the capital needs for next year and beyond, considering the debt maturities and the potential increase in CapEx. Ergen responds by stating that 2026 is a big challenge due to the debt maturities, but they are focused on generating internal cash from operations and believe there is a path to achieve financial stability. However, he also acknowledges that the market environment could play a factor in their ability to meet their commitments.

The company is confident in their ability to improve operations and show positive financial trends with their own network and owner economics. They are seeing traction with the iPhone 15 promotion and are winning customers from other carriers and through their partnership with Amazon. By 2024, they expect to have 100% support for Android devices on their network.

The speaker discusses the compatibility of Apple devices with their network, noting that newer models are compatible with 5G SA software. They also mention their BYOD business and the process of achieving critical mass with device and chipset compatibility. The next question asks about the potential for new capital going into ConneX and combining Boost with it. The speaker also provides an update on discussions with TPG and AT&T regarding DBS, stating that they are currently focused on finalizing the EchoStar-DISH transaction.

AT&T is not planning on making any changes to DIRECTV at this time. However, the company does recognize the value of its retail wireless business and its advanced data-centric network. They believe that these unique capabilities will be key to their success in the future, and they are looking for ways to utilize them in ways that others cannot. The CEO is excited about joining next week, as it will allow him to focus on these opportunities. They may consider selling their retail wireless business or partnering with others who are interested in investing in it. Additionally, their advanced network architecture and tools like cloud and Kubernetes set them apart from their competition and give them a competitive advantage. The CEO believes that the company should focus on leveraging these unique capabilities rather than trying to replicate what others have already done.

Charlie is asked to explain his thought process on the T-Mobile 800-megahertz option and how he plans to handle the $3 billion debt coming due in '24. He mentions that they are focused on the converts coming up in March and that equity could still be a component. He also mentions that they owed $72 million regardless and are thankful for the extra time given by the Department of Justice and T-Mobile. He states that they have already heavily invested in building out the 800-megahertz and have spent over $1 billion on it.

The speaker discusses the unique characteristics and potential use cases for the company's resource, 800, and mentions that it may or may not be financeable. They acknowledge that the marketplace has not improved and their focus for the next 6 months will be on trying to make it successful. The next question from an analyst is about the expected improvement in Retail Wireless gross margins and the significant gap between the market value of the company and the sum of its parts. The speaker is asked if there are any potential changes in strategy that could address this gap.

In response to a question about the company's strategy and potential changes in the future, Charles Ergen and Mike Kelly discuss their focus on obtaining better customers and aligning dealer commissions with long-term profitability. They also mention a decrease in commission costs in the upcoming quarter and state that they evaluate their strategy daily. Ergen believes they are on the right track but welcomes input from his team.

The speaker discusses the company's assets and its position in the market, stating that they are well-positioned for the 21st century. They mention the importance of wireless connectivity and the unique set of resources they have. They also mention their focus on good management and the right team in place. The speaker then addresses a question about the Pay-TV business and mentions that they are always looking at their relationships and how to allocate capital efficiently.

The company is focused on providing good service to subscribers to drive cash and customer loyalty. They are looking for opportunities to be more efficient and optimize their customer experience and capital allocation. The expense outlook for the 5G business saw a step-up in cost of sales, which was due to placing more towers in service. The company plans to manage costs down more aggressively in Pay-TV in the next couple of quarters.

The company plans to install more towers in Q4 and next year, which will lead to revenue generation. The sales and support costs for the video side are being managed to match subscriber and sales trends. The company is now able to right-size and allocate resources more effectively after combining with EchoStar. There is a lot of activity in the 5G enterprise side, but there are challenges due to the lack of personnel, particularly a replacement for Stephen Bye.

Charlie Ergen discusses the integration of EchoStar and the potential for growth in the enterprise customer market. He mentions the recent deal with an airline and how that demonstrates the potential for private network deals with other companies. He also notes that there are no plans for DIRECTV currently, as the focus is on the integration with EchoStar.

The speaker does not have specific data to prove the superiority of DISH wireless compared to current cell service, but mentions that the focus is on building a high-quality network and improving the overall customer experience in the long-term. They also note that while VoNR voice may be slightly better, it will not be a major selling point for consumers. The speaker references the importance of OSS and BSS in shaping the customer experience.

The speaker discusses the launch of digital DBS and DIRECTV, stating that it was not much different from ESPN at the time. They mention making the experience better by digitizing and improving commercials. The focus then shifts to the enterprise business, where controlling data is important for improving products and gaining market share. The speaker is bullish on this aspect of the business and is excited to work with the EchoStar team. They also mention potential differentiation for consumers, but not much in the short-term. On the network side, the OpEx and CapEx are lower, which could lead to lower costs for consumers. The speaker is also interested in fixed wireless access but has been disappointed by the SEC's lack of ruling on their 12-gig fixed wireless.

The speaker discusses the potential of fixed wireless technology for providing broadband, but expresses caution due to government subsidies favoring certain technologies and companies. He mentions past successes with government subsidies, such as electricity and the interstate highway system.

The speaker discusses the potential for wasted money in the broadband industry and the difficulty in determining a return on investment for fixed wireless due to competition from government subsidies and the marketplace. They express confidence in competing in the marketplace, but uncertainty remains. The call concludes.

This summary was generated with AI and may contain some inaccuracies.