A three part review of DISH Network’s 4th quarter conference call
In this section of the DISH Network conference call, the company talked about their 2008 outlook as far as subscribers, HD, the TiVo lawsuit, and possible stock buybacks.
Standard and Poors asked for guidance on gross additions and SAC (Subscriber Acquisition Cost). DISH Network CEO Charlie Ergen declined to give any specific numbers on these topics. When talking about how he views 2008, Mr. Ergen said, “It’s one that we’re pretty excited about because you’re going to have to be pretty good.” He went on to say he thinks Dish can move faster and be more flexible, which will help them compete despite the possible economic slowdown affecting the United States. When pressed by the analyst on whether he thought gross subscriber additions would be up, down or flat, Ergen deadpanned “My crystal ball is not that good.”
When pressed obtaining a SAC number, DISH Network Executive Vice-President and CFO Bernie Han followed Ergen’s lead and said, “I have the same crystal ball that Charlie does. And I don’t think we’re prepared to go into that in any detail.” DIRECTV has publicly stated their SAC runs in the area of $700.
The next topic was HD, and where Dish sees itself in 2008 in this important area. Mr. Ergen stated that DISH Network should be up to 100 national HD channels and should cover 100 local markets by the end of 2008. He hedged this by stating it was conditioned on satellite launches scheduled for the year, and said, “We expect to be very, very competitive in the HD field with satellite, cable and phone companies.” Dish ended 2007 with 70 national HD’s and local HD in 34 markets according to executives.
Dish had nothing to say about the 700 megahertz auction, as the FCC prevented them from commenting publicly on it other that what was contained in the financial statements. Ergen next touched on the TiVo lawsuit, saying they have set aside money for the settlement, but are continuing to appeal the decision against the company. Ergen feels that their own design/patent does not violate TiVo’s, so they are continuing the appeal process.
Duetsche Bank asked in a roundabout way why Dish wasn’t using their balance sheet to improve their low stock price-in other words a stock buyback. Carl Vogel and Ergen commented on various ways to enhance shareholder value, but that at this time they are not announcing any sort of buyback, and are keeping all options open including acquisitions and buybacks in the future.
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