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DISH 6 months behind schedule on 5G network build, Charlie Ergen says

Building a next-generation 5G wireless network is proving harder and more time-consuming than expected, DISH Network Corp. Chairman and co-founder Charlie Ergen said.

DISH announced last year that 5G service would launch in Las Vegas in the fourth quarter of 2021, after previously anticipating it would be ready to go live a quarter earlier. While the network is technically up and running, DISH is still limiting service to just friends and families and expects to expand to additional customers in the coming weeks.

"We're 6 months behind where we thought we'd be," Ergen said during DISH's Feb. 24 earnings call.

DISH currently has over 25 major metro markets ready to be deployed before a June deadline, including around 100 smaller cities across the country. By the June deadline, DISH will have 20% of the population covered.

Ergen explained that DISH had not anticipated having to do as much on the technical side, having instead hoped to ride on the backs of incumbent players in the space.

"We're actually part of the development there in a place maybe we didn't think we were going to have to be," he said.

Ergen also said regulatory issues, as well as supply chain hurdles and continued remote work have impacted the timeline of the launch. "You just don't solve problems on Zoom calls at the speed that you do when you got a whiteboard and you're all together," he said.

One win for the quarter was a new agreement with T-Mobile US Inc. over the upcoming shutdown of Sprint's legacy 3G CDMA network, Ergen said. DISH has been fighting the shutdown, warning that it will hurt customers with low incomes and other vulnerable customers. Ergen did not disclose the details of the new deal but said both companies are cooperating. AT&T Inc. will remain DISH's primary vendor.

"We will support the March 31 CDMA shut off ... We're working together, both on communications, on handset supplies, on incentives," Ergen said.

DISH also came to a retransmission consent renewal agreement with TEGNA Inc. earlier this month. Pay TV operators pay retrans fees to broadcasters to carry local station signals. The companies disconnected in October 2021 when they could not reach a renewal agreement. All told, 63 TEGNA stations in 51 markets were unavailable to some 3.4 million DISH subscribers until Feb. 4.

Ergen said while the satellite operator lost customers due to the dispute, "We proved that you can go through a football season without a network."

DISH ended fourth quarter 2021 with approximately 8.55 million retail wireless subscribers. Retail wireless net subscribers decreased by approximately 245,000 in the quarter, compared to a net decrease of 363,000 in the year-ago period.

The company closed the quarter with 10.7 million pay TV subscribers, including 8.2 million DISH TV subscribers and 2.5 million SLING TV subscribers. Net pay TV subscribers decreased approximately 273,000 in the fourth quarter, compared to a decrease of approximately 133,000 in the year-ago quarter.

Revenue totaled $4.45 billion for the quarter, compared to $4.56 billion for the year-ago period.

Net income attributable to DISH was $552 million for the quarter, or 87 cents per share, up from $733 million, or $1.24 per share, in the year-ago period.

The S&P Capital IQ consensus estimate for EPS in the fourth quarter was 87 cents on a normalized basis and 85 cents on a GAAP basis.

For the year, DISH reported 2021 total revenue of $17.88 billion, compared to $15.49 billion in 2020.

Net income attributable to DISH in 2021 was $2.41 billion, or $3.79 per share, compared to $1.76 billion, or $3.02 per share, in 2020.