We upgraded our recommendation on
DISH Network Corp.
) to Neutral based on its strong financial results for the third
quarter of 2013. Both the top line and the bottom line outpaced
the respective Zacks Consensus Estimate. DISH currently carries a
Zacks Rank #3 (Hold).
Why the Upgrade?
In our view, better pay-TV services, dishNET broadband
services and a strong portfolio of wireless spectrum will help
the company to improve its financials. DISH is gradually
improving its technically superior hardware, the latest of which
is a HD DVR set. This new device will enable subscribers to
automatically skip advertisements for prime time TV programs.
DISH is transforming itself from a low-priced leader in the
U.S. pay-TV industry to a premium service provider to reduce its
subscriber churn rate. The company is concentrating its marketing
efforts on higher-priced subscribers while raising the prices of
its products and cutting discounts.
In the last couple of years, DISH has constructed an extensive
wireless/satellite spectrum base. These precious airwaves are
much coveted by wireless operators. In 2012, the company
purchased 2 slots of the 40 MHz S-band wireless spectrum fromthe
bankrupt TerreStar Networks Inc. and DBSD North America Inc.
Moreover, the company owns a slot of 700 MHz airwaves.
DISH is one of the 34 contenders to bid for the Jan 2014
auction of PCS H Block wireless frequencies by the Fedearl
Communications Commission. Furthermore, DISH also offered a bid
to acquire 40 MHz of wireless spectrum held by LightSquared,
which is currently bankrupt.
On Jun 17, 2013, DISH and
NTELOS Holdings Corp.
) jointly started providing fixed- mobile broadband network to
offer high-speed Internet service to areas served by NTELOS. This
joint venture will reach other parts of the U.S. from early
Meanwhile, on Dec 17, 2013, DISH together with
) announced that the two companies have decided to jointly
develop and deploy a fixed broadband network in Corpus Christi,
in Texas. The network is expected to start from mid-2014 on a
trial basis. If successful, then the two entities may further
extend the broadband network to other areas. According to
industry rumors, DISH may merge with its closest competitor
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
NTELOS HOLDINGS (NTLS): Free Stock Analysis
SPRINT CORP (S): Free Stock Analysis Report
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