Dish Chairman Charlie Ergen Sees 80% Chance of Success in Wireless Space

8:42 AM PST 02/23/2012 by Georg Szalai
Alex Wong/Getty Images

But the company needs a waiver from regulators, he says, as CEO Joseph Clayton emphasizes management's "very low" tolerance for losses at Blockbuster.

NEW YORK - Satellite TV giant Dish Network, which has agreed to spend billions of dollars on acquiring wireless spectrum, has an 80 percent chance of succeeding in the wireless space if it gets a waiver from regulators in the near future, chairman Charlie Ergen said Thursday.

Wireless is "a key, even a transformative strategy for us," he told his company's quarterly earnings conference call, arguing it is a logical second product adding to its core video service.

Dish last year submitted to the FCC a plan for a nationwide high-speed network for wireless Internet devices, requesting regulatory waivers and clearance to buy assets of DBSD North America and TerreStar Networks.

Established mobile companies have argued that the FCC should consider whether the new Dish wireless network could interfere with other services. And they have suggested that the company's plans be considered in a broader, longer process about the use of airwaves, which Dish says would cause delays that would stymie its plans.

"We'd like to play" in wireless, Ergen said Thursday, highlighting his hope for a waiver, which could come in the coming weeks.The FCC's official 180-day review window ends March 12. If Dish doesn't get a waiver, its chances of wireless success are lower, and the company would have to consider the risks of delays and explore potential alternatives for its wireless spectrum, Ergen added. That would be "unfortunate," he concluded without outlining possible alternatives. Analysts have suggested that Dish could sell its wireless spectrum for a profit.

Meanwhile, Dish CEO Joseph Clayton on Thursday told analysts and investors on the conference call that Blockbuster, which the company acquired in a bankruptcy auction, has helped subscriber momentum as Blockbuster-related offerings are a satellite TV customer acquisition and retention tool.

But he also said Dish would close 500 Blockbuster stores this quarter as it has a "very low" tolerance for losses at the video rental business. Management said its goal is to keep Blockbuster near breakeven as it tries new business models - on a stand-alone basis or in connection with Dish's pay TV service.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai

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