We reiterate our Neutral recommendation on
DISH Network Corp.
) following its mixed financial results in the third quarter of
2012. Although the revenue fell below the Zacks Consensus
Estimate, net income topped the same. Blockbuster movies
streaming services, better overall pay-TV services, and growing
customer loyalty helped the company to improve its net income.
DISH Network is continuously improving its technically superior
hardware, the latest of which is a HD DVR set. This new device
will enable the subscribers to automatically skip all
advertisements for the prime time TV programs.
On the other hand, the recent proposal of the FCC to allow
DISH Network to establish a wireless network with limited power
is a major setback as it was trying to become a unique bundled
service provider of wireless voice and data together with a
state-of-the-art video distribution network. The company has
spent over $2.9 billion to purchase wireless spectrums and
altogether it has spent more than $4 billion till now to pursue
its wireless broadband ambitions.
Nevertheless, we believe the FCC Proposal may become a
long-term positive for DISH Network. The company still enjoys the
opportunity to collaborate with several established telecom or
tech companies to jointly establish a wireless network or may
just sell its airwaves for monetary gain.
) is already negotiating with DISH Network for a specialized
wireless network using DISH Network's spectrum, while
) may look to buy those airwaves.
At present, DISH Network is exploring its opportunities in the
over-the-top TV streaming segment. The company is also
negotiating with several media companies, including
Scripps Networks Interactive Inc.
), and Univision Communications Inc. regarding online TV
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