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DISH Network Corp. (DISH - Analyst Report) reported solid financial results for the fourth quarter of 2011, significantly outpacing the Zacks Consensus Estimates. Most importantly, the company generated net subscriber additions in the last quarter, reversing the trend of the prior two successive quarters.

This solid performance was primarily attributable to the new movies streaming services that DISH Network has started after its acquisition of Blockbuster movie chain. The company is continuously doing innovation of technically superior hardware, the latest of which is a HD DVR set with huge storage capacity. Furthermore, the company has already acquired huge amount of wireless spectrum.

DISH Network is negotiating with several content developers to obtain rights to distribute online video versions of the programs. This will enable DISH Network to stream cable channels of the media companies to Internet browsers.

In addition, the company is distributing place shifting HD-DVR developed by Sling Media that enables its subscribers to view programs from their respective pay-TV subscriptions on Internet and mobile platforms. DISH Network renewed its agreements with Frontier Communications Corp. (FTR), ViaSat Inc. (VSAT), and Charter Communications Inc. (CHTR - Analyst Report) to offer digital TV service to the latter’s customers, who are mainly settled in the rural areas, thus further extending the company’s reach in every corner of the country.

Nevertheless, recently, DISH Network suffered a major blow as the FCC (Federal Comm delayed its decision for a waiver of using 40 MHz S-band wireless spectrum only for mobile phone use. The FCC stated that they are in process of rulemaking and the final decision will be taken once the rule will be finalized.

However, various experts have opined that such rulemaking may take several months or more than a year. For the time being, DISH Network has to put aside its ambition to deploy a high-speed wireless broadband network to offer mobile Internet services to its customers.

We, therefore, maintain our long-term Neutral recommendation on DISH Network.

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