A STARK WARNING – Research firm MoffettNathanson has continued to express concerns over Dish Network’s financial viability and ability to build a sustainable mobile business, despite recent progress in network development. Dish has $2 billion in debt maturing in November. The company is currently exploring funding options at all levels of its capital structure, amidst difficulties in securing additional resources. However, the company could face bankruptcy within six months.
Craig Moffett, a senior managing director at MoffettNathanson, has issued a stark forecast for Dish Network, predicting potential bankruptcy within the next four to six months. This marks his first specific timeline following three years of warnings about the company’s financial health.
The prediction followed EchoStar’s first-quarter earnings announcement on May 8, where the financial strain on Dish Network, despite its recent merger with EchoStar intended to bolster financial stability, was evident. Paul Orban, EchoStar’s CFO and EVP, disclosed during the earnings call the urgent need to address $2 billion in maturing debt by November 24, having already managed a $1 billion payment in March using available cash. Orban highlighted the lack of sufficient cash on hand or projected cash flows to support operations or cover the upcoming debt, noting ongoing discussions with various funding sources to navigate these financial challenges.
Moffett expressed skepticism regarding EchoStar’s ability to secure additional funding or sell a significant portion of its wireless spectrum before the end of 2026, citing regulatory complexities and market conditions. He noted that Dish Network’s role as a fourth bidder in past spectrum auctions primarily inflated prices, and with major competitors like T-Mobile, AT&T, and Verizon having already invested heavily, they are not positioned to aggressively purchase new spectrum.
EchoStar’s president and CEO, Hamid Akhavan, during the earnings call, spoke about the company’s efforts to refinance, mentioning that it had received various offers that could potentially support its long-term strategic goals. He pointed out that meeting the FCC’s next target—covering 75 percent of each spectrum license area with 5G by 2025—would necessitate additional capital.
Despite these challenges, there were some positive notes. EchoStar reported that Boost Mobile was net positive for subscriber growth in March, and there are expectations for this trend to continue into the second half of the year. Additionally, John Swieringa, president of technology and COO at EchoStar and Dish Wireless, shared that half of the devices activated in Q1 could connect to its 5G network, indicating progress in network capabilities.
However, the broader financial picture remains concerning. EchoStar’s net loss attributable to shareholders stood at $107.4 million, a sharp decline from the $253.5 million profit reported in the previous year, with revenues also falling by 8.5 percent to $4 billion.
As Dish Network moves forward with its Boost Infinite post-paid 5G service and other initiatives, the focus remains on enhancing service offerings and operational execution to navigate its precarious financial position effectively.
