DISH Network Corp. Chairman Charlie Ergen believes it is "probably inevitable" that DISH and AT&T Inc.'s DIRECTV, as the two largest U.S. satellite pay TV providers, should merge.
Speaking during a Feb. 19 earnings call, Ergen noted that growth in the TV business is not coming from linear TV. Eventually, a merger could make sense because of the challenge of competing against over-the-top competitors, he said.
However, Ergen acknowledged that there could be regulatory challenges to a possible deal.
Telecommunications attorneys previously told S&P Global Market Intelligence in September 2019 that regulatory concerns and uncertainty could kill a potential deal between the two satellite TV operators.
Federal regulators in 2002 shot down a potential merger between DIRECTV and DISH, which at the time operated as EchoStar Communications. However, the pay TV landscape has changed drastically since then, with the introduction of myriad subscription streaming services, telco TV providers and other video options.
Turning to T-Mobile US Inc.'s merger with Sprint Corp., Ergen expressed high confidence that the deal will eventually go through in the wake of a federal judge's recent approval of the deal. Under the terms of the wireless operators' proposed settlement with U.S. Department of Justice, T-Mobile and Sprint must divest Sprint's prepaid business — including the Boost Mobile, Virgin Mobile and Sprint prepaid brands — to DISH. The satellite operator will also acquire 14 MHz of Sprint's nationwide 800 MHz spectrum.
Additionally, the combined T-Mobile and Sprint must provide DISH with "robust access" to the T-Mobile network for seven years as the satellite company builds out its own 5G wireless network. Next-generation 5G technology promises faster speeds and greater opportunities for connectivity, enabling the era of the internet of things.
When asked if DISH will announce a founding partner for its 5G wireless network build-out, a DISH executive said the company has received a lot of interest from prospective partners but noted that it does not feel any urgency to strike a strategic partnership.
For the fourth quarter of 2019, net income attributable to DISH totaled $389 million, or 69 cents per share, up from to $337 million, or 64 cents per share, in the year-ago period.
DISH reported total revenue of $3.24 billion for the quarter, down from $3.31 billion in the prior-year period.
The company closed 2019 with 11.99 million pay TV subscribers, including 9.40 million DISH TV subscribers and 2.59 million subscribers on its virtual video service Sling TV. Net pay TV subscribers decreased by about 194,000 in the fourth quarter of 2019, compared to a net decrease of 334,000 in the year-ago quarter.
For full year 2019, DISH's attributable net income was $1.40 billion, or $2.60 per share, down from $1.58 billion, or $3.00 per share, in 2018.