PARIS – U.S. satellite television and consumer broadband provider Dish Network Corp. on July 21 said it had lost broadband subscribers this year because of a lack of capacity in high-demand regions and the company’s decision to be stricter about who it lets onto the service.
Englewood, Colorado-based Dish said the first issue should be solved starting in 2017 as both its satellite broadband providers, Hughes Network Systems’ HughesNet and ViaSat Inc.’s Exede, launch new satellites with Ka-band beams trained on the most promising geographies.
Hughes and ViaSat have reported slowed growth in their own broadband sales efforts, citing the same reasons as Dish.
Dish did not break down its performance in selling the Hughes or ViaSat services, which are similar but not identical.
The fact that Dish continues to sell, on an ostensibly equal basis, Hughes and ViaSat broadband is striking insofar as Dish and Hughes are both owned by Charlie Ergen. Ergen’s Hughes ownership is thorough EchoStar Corp., which owns Hughes.
Hughes and ViaSat have tinkered with their sales models as they seek to avoid signing up customers who will quit the service in short order after bumping up against the data-download ceilings that satellite service providers impose to assure bandwidth availability for their customers.
Dish said that as of June 30, its dishNET service had 613,00 subscribers, a drop of 15,000 subscribers from three months earlier and in contrast to a gain of 4,000 subscribers in the same period a year ago.
The decline in subscribers was “primarily due to stricter customer acquisition policies, including an increased emphasis on acquiring higher-quality suscribers, and satellite capacity constraints in certain geographic areas,” Dish said in a filing with the U.S. Securities and Exchange Commission (SEC).
The company also referred to “a higher number of disconnects” during the period.
Hughes and ViaSat have both suffered from the fact that their highest-capacity satellites operate fixed beams over locations whose demand for broadband had to be guessed years before the service started. Both have since learned that the highest-demand regions are those near urban centers and not in rural areas and have tailored coverage of their follow-on satellites accordingly.
Hughes and ViaSat were new to the consumer mass market when the began selling satellite broadband and faced a steep learning curve as they trained sales agents not to rack up subscriber acquisitions to make their numbers, but rather to assure each new subscriber understood what satellite broadband could and could not do.
Hughes and Viasat both operate proprietary consumer broadband systems, meaning their provide not only the satellite throughput but also the consumer premises equipment.
Dish said under its contract with Hughes, dishNET has the right, but no obligation, to purchase Hughes hardware. The distribution agreement runs to March 2024. Dish said that for the six months ending June 30, it purchased $5 million in Hughes broadband hardware, compared to $4 million for the same period a year ago.
