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Is DISH Network Transforming

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DISH Network Corp. (DISH - Free Report) , the second largest satellite TV operator in the U.S., is trying hard to be storage medium for the valuable wireless spectrum that can be used to grow a viable pay-TV distribution network or can transform the company to a wireless service provider. Recently, DISH Network has made a cash offer of $1.375 billion for bankrupt telecom operator TerreStar Networks Inc. The most interesting fact about TerreStar is that it offers wireless communications over a satellite network.

 In the bankruptcy auction, which will be held on June 30, 2011, DISH Network is competing with other bidders including a group of senior debt holder of TerreStar and wireless operator MetroPCS Communications Inc. ). Any other company may also bid for TerreStar within June 27, 2011.

In March 2011, DISH Network purchased bankrupt DBSD North America for $1.4 billion. Using these slots of airwaves, the company can form a very formidable video-on-demand service over a wireless network of mobile handsets such as smartphones DISH Network, the extremely valuable spectrum of DBSD for both wireless and wireline communications. Additionally, DISH Network itself owns a slot of highly demanded 700 MHz wireless frequencyand tablets.

Satellite TV operators are facing increasing competition from cable TV providers offering innovative triple play bundled services. Competition has also intensified with the rapid growth of fiber-based pay-TV services offered by telecom operators. Moreover, new IPTV products/services have also begun to impact the pay-TV industry.

DISH Network is already  transforming itself from a low-priced leader in the U.S. pay-TV industry to a premium service provider to minimise its subscribers’ churn rate. The company is concentrating its marketing efforts on higher-priced subscribers and raised the prices of its products and cut back discounting.

We maintain our long-term Neutral recommendation on DISH Network. Currently, it holds a Zacks #3 Rank (Hold) on the stock.

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