DISH Network Corp. ( DISH - Analyst Report ) , the second largest satellite television provider in the U.S., announced in a regulatory filing that the company has lost 10,000 net subscribers in the second quarter of 2012.

DISH added 665,000 new customers and lost 675,000 customers in the second quarter of 2012, thus taking the total subscriber base to 14.06 million. The result is significant for the company as it had lost 135,000 customers in the same quarter of last year, reflecting 92.6% improvement in its net subscriber base. However, its churn rate had increased to 1.6% from 1.35% in the first quarter 2012.

During the second and third quarter of 2011, the company lost about 250,000 subscribers. However, the trend reversed after that as the company gained 126,000 net subscribers in the fourth quarter 2011 and first quarter 2012. We believe that this improved result is based on the company’s decision to offer Blockbuster movie passes to all new and existing DISH Network customers.

Blockbuster movie passes, during a two-year subscription period, allow DISH customers to receive DVD and video games by mail as well as allow them to stream of thousands of movies and TV shows.

DISH is awaiting Federal Communications Commission’s (FCC) approval to get the license to establish a wireless broadband network, which if completed will allow the company to combine Blockbuster’s movie streaming services and offer a highly innovative bundled service. This will not only lead to subscriber addition but will also help DISH to withstand pressure from Verizon Communication Inc.’s ( VZ - Analyst Report ) FiOS TV.

The current Zacks Consensus Estimate for DISH Network Corp. is pegged at 68 cents for the second quarter with a growth rate estimate of (8.98%). For 2012 and 2013, the Zacks Consensus Estimates stand at $2.73 and $2.79 with a growth rate of (5.49%) and 2.20%, respectively.

Recommendation

Currently, DISH Network has a Zacks #3 Rank, implying a short-term Hold rating on the stock. We are also maintaining our long-term Neutral recommendation on the company’s shares.