Dish Network lost about 81,000 wireless net subscribers in the first quarter of 2023 compared to a net loss of 343,000 in the year-ago quarter.
Some analysts expected the loss in prepaid Boost Mobile customers to be even higher due to the cyber attack that affected its ability to serve Boost Mobile and its satellite TV customers.
On the day of the company’s last earnings call on Feb. 23, Dish revealed an internal outage that affected its internal servers and IT telephony, as well as customer care and internet sites.
In an SEC filing today, Dish said the investigation is now substantially completed into the network outage and the subsequent data hack that it disclosed on February 28.
It determined that its customer databases were not accessed in the incident but it did confirm that certain employee-related records, as well as a limited number of other records containing personal information, were among the data extracted.
“We have taken steps to protect the affected records and personal information, and we received confirmation that the extracted data has been deleted,” Dish stated.
During the quarter, Dish said it incurred about $30 million in expenses related to the security breach. It doesn’t expect to incur material expenses in future periods resulting from the cyber-security incident.
Wireless losses better than expected
Dish has been steadily losing Boost Mobile customers since it was acquired as part of the Sprint/T-Mobile merger conditions. Initially, there were problems getting CDMA handsets replaced when T-Mobile shut down the CDMA network and Boost customers didn’t have compatible handsets.
Last month, Dish announced that Stephen Stokols, who was heading the Boost Mobile business, was leaving, to be replaced by Dish alumni Michael Kelly. Going forward, Kelly is now responsible for sales, marketing and operations of Dish’s retail wireless brands.
In a note for investors today, New Street Research (NSR) analyst Jonathan Chaplin said its Q1 results were better than feared. After the hack, NSR estimated Dish’s wireless losses for the quarter could be 282,000 compared to other analysts’ consensus of 184,000.
“Dish did materially better on service revenue, EBITDA and FCF than we feared,” Chaplin said. “They did a little worse on DTV subscriber losses but better on Boost subscriber losses. Dish missed consensus on EBITDA and KPIs, though not all estimates were updated for the hack (buy-side was closer to our estimates; stock has been cut in half since the hack).”
For Dish Network as a whole, net income fell to $223 million in the first quarter compared with $433 million for the year-ago quarter.
Wireless ARPU was $36.43 compared to the previous quarter’s $37.61. Churn was 4.24% in Q1 versus 4.57% in Q4 of 2022. The company ended Q1 2023 with a total of 7.91 wireless subscribers.
Dish is hosting its first-quarter 2023 conference call later today, so stay tuned.