Dish, EchoStar Confirm Plans For Completely Pointless Merger

We just got done noting how Dish Network's long-hyped 5G wireless network islikely doomed. While they're technically building a wireless network," the network's coverage, phone selection, and overall quality has provenlaughableso far, and there have been growing worries that Dish isrunning out of cash as it tries to meet regulatory deadlines for 5G deployment.

Hoping to distract the press and regulators from growing concerns about bankruptcy, Dish last monthleaked wordthat they were considering a merger with satellite provider EchoStar (spun out from Dish back in 2008). They've now confirmed the planned deal, claiming it will provide Dish with the financial flexibility" to finish the company's attempted pivot from satellite TV to wireless and streaming:

The merger is meant to providemore financial flexibilityfor Dish as it seeks to become a major competitor in the wireless service business, the co-founder and chairman of both companies, Charlie Ergen,toldThe Wall Street Journal. After the merger, EchoStar CEO Hamid Akhavan will serve as president and CEO, while Dish CEO Erik Carlsonwill make his exit."

But in a letter to investors, telecom analysts at MoffettNathanson noted that EchoStar's finances will only be a drop in the bucket" when it comes to fixing the money problems at Dish:

Dish's free cash flow, even with slower capital spending, is now firmly in negative territory. The once-core satellite TV business is imploding. The once-savior Sling TV is shrinking. The springboard-to-wireless Boost pre-paid business is unraveling. The transition-to-post-paid Boost Infinite is years delayed and nowhere to be seen. Consolidated EBITDA cratered by more than 40% YoY."

You might recall the Dish network was the Trump-era fix" for the competitive erosion caused by the Sprint and T-Mobile merger. We noted back in 2019 that the whole thing was adoomed messcustom built by Trump-era antitrust enforcers" as a flimsy way to justify additional industry consolidation. The effort was quickly plagued by delays and infighting between Dish and T-Mobile.

Now, notice how the fix for the mess created by consolidation is, once again, telecom and media industry consolidation.

Under the Trump-era FCC/DOJ deal, Dish was required to deliver 5G service to 70 percent of the population by this year. A mandate it technically met, even though the resulting service has generally been laughed at. But things get much more difficult for Dish now, as it's obligated to reach 75 percent of the country by 2025. That's going to require a much more expensive push into suburban and rural markets.

But Dish continues to lose not just traditional satellite customers, but the streaming (SlingTV) and wireless customers its pivot was meant to attract. Duct-taping a satellite TV provider to the side of this mess might buy Dish CEO Charlie Ergen a small additional runway, but it's still not particularly clear Dish can actually become a popular wireless competitor that consumers actually want to use.

I still suspect this all ends with Ergen selling his vast troves of spectrum holdings and half-completed network to somebody like Verizon, and the FCC doling out a tiny wrist slap (if that) for Dish missing later-stage deployment obligations. And the Trump-era regulators and high-level executives that birthed this shaky plan will, as always, just pretend the whole thing never happened.