Dish Network is looking to find partners to potentially launch a mobile-video service with the 700-Megahertz wireless spectrum it purchased earlier this year for $712 million, officials said Tuesday.
During a first-quarter conference call, both Dish Network chairman Charlie Ergen and vice chairman Carl Vogel said the company will carefully test the waters—trying out different transmission technologies and looking for a profitable business model—before it plunges ahead to do mobile TV. And Dish Network doesn’t want to go it alone.
“We think it’s (the spectrum) a strategic asset that will allow us to have broad discussion with a number of parties,” Vogel said. “Overall, our intent is to certainly bring in partners.”
But he added, “We’re a long, long, long way from building anything out. We’re a long, long, long way from deciding who our partners will be and when, but we do think it is a valuable piece of spectrum that gives us an opportunity to have numerous strategic discussions that will provide an asset that’s additive to the business we already have.”
During the call, Ergen also told analysts that he thinks Dish Network is on its way to addressing the issues that dragged down its first-quarter subscriber growth, which was down 88.7%, with only 35,000 new subscribers compared with 310,000 a year ago.
He said competition from telcos that have launched video hurt Dish Network—as did its operational problems and its lagging behind DirecTV in terms of HDTV offerings. But Dish Network is making improvement in call centers and installs, and is on track to offer 100 HD networks and local HD in 100 markets, according to Ergen.
“If you look in the mirror and self criticize, I just would have gotten more involved in the operations…I was very involved strategically, but not involved operationally,” Ergen said. “That’s certainly the biggest mistake.”
He added, “We probably missed the HD window last year.”
Of DirecTV, which gained 275,000 subscribers in the first quarter, Ergen said. “Now, they’ve got the momentum and they’ve certainly got brand awareness of HD, but we’ll have a competitive product there.”
As for the 700 MHz spectrum, which Dish Network will get next year, it allows the satellite provider to continue to explore ways to offer mobile and portable content, as does the company’s acquisition last year, place-shifting Sling Media, Vogel and Ergen said.
But they plan to be cautious about potentially launching any mobile video service, since so far such an offering really haven’t been commercially successful.
“Nobody’s made money in the mobile business today that I know of,” Ergen said, saying that Dish Network will do several tests, including one of European mobile-TV broadcast technology with Alcatel-Lucent equipment in Atlanta.
After such testing, whether Dish Network deploys capital will depend on the marketplace, Ergen said.
“In terms of 700 MHz, this acquisition of spectrum dovetails with our broader philosophy that we want to be the best we can at video,” Vogel said. “Our principal interest in this is to provide some mobility and portability options that dovetail nicely with both our Dish customer base, as well as our Sling product.”
Dish Network is “very, very early in the process; very, very far away from deploying any meaningful amounts of capital and we really want to get a sense of where the technology is going—with not only us but other holders of 700 MHZ capacity—to see if we can put together a suite of services that are compelling,” Vogel said.