Q1 2022 DISH Network Corp Earnings Call

Yeah.

Please standby.

Good day and welcome to the Dish Network Q1, 2022 Conference call. Today's conference is being recorded at this time I'd like to turn the conference over to Mr. Messner. Please go ahead Sir.

Alright, Thanks, Justin and good morning, everyone and thanks for joining US we're joined on the call today about Charlie Oregon, Our chairman Erik Carlson, our CEO and Paul Orban, our CFO on the wireless side, we've got Tom Cullen EVP of corporate development, Steve and by our Chief Commercial Officer, Jon Springer, President and C O wireless and as always before we start I need to remind you of our safe Harbor.

During this call we may make forward looking statements, which are subject to risks uncertainties and other factors that could cause our actual results to differ from historical results or from our forecast we assume no responsibility for updating forward looking statements for more information on factors that may affect future results. Please refer to our SEC filings and with that like to turn it over to Eric.

For opening remarks, Thank you, Tim and welcome everyone and thanks for being here today as many of you are aware, we have an analyst day on Tuesday may 10th where we're going to go into more depth on our wireless plans.

To watch the live webcast will be on our Investor Relations website for today, we're going to try to keep it short, but I'm going to begin with a few brief comments before opening it up to your questions.

The subscribers for all of our brands, we simply didn't execute according to our expectations. However, we did exercise good financial discipline, we continue to make progress on other fronts and I'm pleased to report that our wireless network build is on track.

In the first quarter dish TV lost roughly 228000 subscribers. This is driven by several factors, including our local programming dispute with Technip.

As discussed during our earnings call last quarter, we signed a new agreement with them in the first quarter and now have that largely behind US. In addition, our price increase is now in effect for customers impacted by that dispute, which making it a positive impact on our bottom line this year.

So just to be continues to be profitable and generate significant free cash flow. Thanks to our financial discipline and strategic marketing investments, we do remain focused on acquiring and retaining long term profitable customers and we continue to play where we're strongest in rural America with higher credit quality subscribers.

Turning to sling for a minute in the quarter. We lost approximately 234000 subscribers, we had higher than expected customer attrition following the football season, but the bottom line is we simply didn't execute to the level. We expected in the second half of the year, we did finalize the reengineering of the platform and user interface.

Had a tough quarter, but we're optimistic that.

We can leverage the platform you know our messaging high value products and great experience to reach customers, who overall video content bills are too high but still want the excitement of live TV, we all.

<unk> strengthened our leadership team and our sling, we hired Gary Shannon as our new EVP and group President of Sling TV, Gary has got an excellent track record not only the pay TV industry, but streaming he along with new and existing sling leaders, who will be focused on increasing market share and driving profitable growth for the business.

Switching gears a bit of our wireless business continues to make progress.

Our retail wireless business has lost approximately 343000 subs in the quarter.

We're still committed to our disciplined operational approach and driving profitable growth in the segment. It's important to note that our retail wireless results have been impacted by our acceleration of the CDMA shutdown, which continues into Q2, albeit to a lesser extent. However, during the first quarter of 2022, we had T mobile reached a proposed settlement and amendment.

Which among other things settle all open disputes, including CDMA matters. It contained favorable terms to us before we in T. Mobile can enter into this proposed settlement or amendment, we're required to obtain the approval of the department of Justice, which has been reviewing its since February 22nd of 2022.

CDMA shut down along with the delay in approval has materially negatively impacted our ability to compete this includes our acquisition and retention efforts and our results of operations.

Hope to hear from the Doj soon and are optimistic that the settlement and amendment with T mobile will be approved.

Ireland network team has made significant progress and we're well on our way to meeting our commitments, including our upcoming deadline of covering 20% of the population by June 14th.

<unk> chosen our free cash flow for the quarter for the first time in many years, where in the negative but that's because of the investment we're making at our network for.

For some context Capex was $597 million in Q1 for that wireless segment.

We expect our quarterly wireless network, Opex and Capex to be consistent with Q1 for the remainder of 2022. It is important to note that we have the necessary capital to fund portions of the build happening. This year. We are excited to be entering the next phase of our deployment on Wednesday of this week, we commercially launched project Genesis in Las Vegas.

A moment to congratulate the entire team. This is a major accomplishment, but look it's just the beginning as we prepare to launch in additional markets as discussed on our last earnings call. We also just announced a new partnership with Samsung that will help our network expansion.

Greater flexibility to deploy our cloud native network.

But it's going to be a remarkable year as we execute our vision to change the way of the world communicates. Our best days are certainly ahead of US here, we'll share more details regarding our player. Our wireless plans next Tuesday in Las Vegas at our Analyst day, and we'll look forward to seeing many of you there now I'd like to open it up to Q&A.

Thank you if you would like to signal with questions. Please press star one on your cash.

<unk> tone telephone if you're joining us today using a speaker phone. Please make sure you knew function is turned off to allow your signal to reach our equipment again that is star one if you would like to signal what questions.

Our first question comes from Michael Rollins with Citi.

Thanks, and good morning, I'm curious, if you'd talk a little bit more about the experience that customers should receive in Vegas and as more markets open up in terms of.

Average speeds performance and then on the pricing front. The early pricing do you view this as a.

Promotions to get customers, something where you see pricing.

Sustaining over a longer period of time for dish or something maybe that moves up as the network becomes more robust over time. Thanks.

Yes. This is John square I guess, thanks for the question I'll take that one obviously.

A big step forward with us, bringing commercial users onto the network earlier this week.

With respect to project Genesis.

It's important not to read too deeply into that in terms of a longer term retail strategy.

With project Genesis, we've been in beta user mode.

For most of the first quarter, we're looking to attract sort of grassroots users early access users who can give us feedback on the network and are doing that.

Quite regularly.

So as we've transitioned from beta users to commercial the phone.

This again is to attract early users we've got engagement app other things where users are giving us feedback.

The goal is to have a very robust network in Vegas.

Nail it there and then we can scale it out across all the other markets.

And we're learning quite a lot work the early access users and we would expect ultimately to transition project Genesis into really our retail brands, where we can compete across the various segments of the market.

Speeds are good feedbacks generally good.

We'll be showcasing some of that next week for people, who would like to see it.

But we're generally happy with where we are in I mean.

Obviously with anything it is just the start of the race. So theres a lot of work to do.

Thanks.

Yeah.

Thank you and our next question will come from Ric Prentiss with Raymond James.

Thanks, Good morning, Scott.

Here's a question first on the CDMA shut down <unk>.

Now, obviously painful experience licenses, so without the Doj could there be any worse.

As to your financial results benefits retroactively apply and the second part of that question is what about the <unk> LTE network.

Any further impacts.

And that side.

Yeah.

Paul you want to take I'll take that if you didn't understand the second part and take the first part yes. This is Paul I'll take the first one yes, once we actually do sign that agreement will retroactively.

All into Q2, but we will take any benefit of other contract that related to Q1, and the Q2 financial results.

And this is John I'll take the second part.

Which I think was with respect to depend.

The pending LTE shut down.

Which is slated for later this quarter.

There's not really a big impact there for boost mobile some of our other brands.

Including Ting mobile, which is the postpaid brand, we have as well as Republic wireless do have some customers on the LTE network and we've been working to certainly migrate those subscribers. That's been the customer profile is a little different there. So it's been.

A little smoother than working with boost mobile subscriber base.

No no no significant.

Sort of a large event there for us we've been managing that certainly.

The last several quarters.

Okay. That's good to hear and then obviously the 10-Q points out.

Now you are will need to raise capital plan to raise capital can you help us understand just framework about sizing it timing it what type capital you might be interested and does the spectrum purchase of the low band and <unk> 23 option the debt maturity one to 'twenty, three and how any wholesale a private network contracts Mike.

Fit into your timing also but just a quick question kind of on the size and timing and tight as youre thinking about it.

Yes. This is Charlie I'll take that and I want to make just one comment on the CDMA.

Shut up and one of the biggest problem is that the delay is that we don't get back any kind of competitive advantage, we have in the marketplace by having a new deal.

That will never get back so everyday that goes by that they were not able to get.

Some feedback from justice they clearly.

Didn't like that for whatever reason didn't make the.

The amendment as it was presented to them by Us and T. Mobile. So we expect there'll be did they have some changes in mind, otherwise obviously would've taken this long so.

There must be some changes so we do have some concerns there I do think it did I guess my biggest concern is I hope that that just is still wants four people four players in the marketplace. I mean, I think thats. The biggest thing because it has been it certainly has had a material negative effect.

We got kind of a negative benefit we kind of executed on the negative benefits of that deal with the CDMA shut up by accelerating that.

And and taken some some losses on customers at cost.

That perhaps could have been.

Definitely no maybe never took place, but the T. Mobile's credit were worked out.

A more fair arrangement in terms of how to work together on that and Unfortunately, we haven't got the benefit of that so.

I know that the justice, there's a lot of things on their plate and maybe this isn't the most important thing that they are looking at but for us obviously.

It is a very important thing and one that we'll never get back to square one regardless of when they roll in and there's no guarantee they're gonna rule. So so I do think thats, a risk that that everybody should be concerned about as far as that exasperated problem.

In terms of raising money I think you can look at it that the the.

We have capital on hand, and cash flow to continue to build out, but we get the margin next year with the next.

But I think it's a billion and a half bond repayment will need to refinance or wanting to raise capital or refinanced part of that.

In that timeframe, if that gives you an order of magnitude of of of.

But when I look at it as we've always answered we think theres a number of.

Opportunities available for us in the marketplace.

We look at those and say, what's the best one for our capital structure and you know we've been a good steward of capital were pretty conservative.

You can get a feel for.

We'll look at those options and some will be better well obviously the market is very choppy right now so we'll see where the where the market kind of stabilizes and go from there.

Thanks, Susan.

And our next question will come from Doug Mitchelson with credit Suisse.

Oh, thanks, so much I guess two questions as the launch of the network in Vegas changed the nature of the partnership discussions you've been having over the last few years I think Charlie you mentioned in the past that you thought those would get more productive as you as you proved out the technology and now you've launched the network I think secondly, I'm just curious when will we start to see the ban.

And 70 supported handsets and is that a prerequisite at all for anything you want to do in terms of starting to go along with device subsidy path. Obviously, you just have the.

800 dollar Motorola phone to start but I assume that's got a you know the number of handsets over the next year.

Expand dramatically, but you know Windsor and seven you're going to be in those handsets.

Yeah, I'll, let John take the second part on band 70, but.

I mean, obviously, we felt like you know proven that.

To do an open open ran cloud native Virtualized network <unk> Standalone hasnt been done in the world. So.

We're the first.

People to do it so we've always felt that it's you know.

It's obviously, a very difficult task that otherwise are the people who have done it.

They've been in the business a lot longer than we have so.

We're very proud of it and obviously, we think that that we've taken a lot of risk out of the technology with great support from our vendors. We obviously couldn't have done this along with that a lot of help and so I.

I think that's one thing I think the other the other big overhang.

As the first milestone for the FCC, which which we're still on track for you know we're not spiking the football.

Yet, but we're still on track for that so.

We think those are two big.

If there's any good business plan can raise capital.

Just about regardless of times, and we think we really have something special and.

We're excited to talk about it and show people.

John I'll take the I'll take the second part this is John <unk> again with respect to handsets.

So we are out of the Gateway project Genesis.

With the devices that do not have band 70.

The devices that we're deploying under Genesis and in the early days of our network are X 65, Qualcomm devices, where we're aggregating band, 66% and 71.

We do have band 70 devices in the labs now.

Working with all of our major Oems on that.

<unk> to be able to start launching commercially with band 70 devices in late Q3.

And that's really when we can start hitting the gas in terms of.

Loading retail subscribers on the network those sorts of things.

One of the things we need to focus on is making sure that.

<unk> 70, as well as some of the software required to run the network makes it from sort of the highest tier of devices.

All the way through the portfolio.

And our team is working to make that happen and we're confident we'll have 70 devices come into the portfolio soon.

Great. Thank you.

Thank you and our next question will come from David Barden with Bank of America.

Hey, guys. Thanks, so much for taking the questions I guess.

My first would be if you could kind of update us.

Where the AT&T relationship currently stands on both the wholesale and the network sharing.

<unk> side of things and where you expect maybe.

Maybe that could trend.

Over the course of the year, specifically on the network sharing side.

And then second a bigger picture question, partly I think as we get further and further into the wireless build you know the investment side.

It becomes very apparent.

You know the return side remains a black box I think for most of us on the outside of the dish organization.

When we look at Las Vegas from the outside dish looks like Alaska market.

Single device.

Consumer wireless broadband player, which doesn't really seem to be.

As novel approach to return as the approach Youre trying to take towards investment and maybe this is something that's going to come out on Tuesday, but I think we ask this every quarter, which is.

What is the pot of gold at the end of the Rainbow look like thanks.

Yes, I think I'll take the retail wireless part and then maybe.

Maybe on the network side, Steven and if Theres something leftover for John .

But.

The on the retail side that.

I will talk more about this vegas, but obviously as a fourth player.

We certainly have.

Historical data, where we think that goes in is certainly should be a very profitable business for us. Obviously is the fourth player you you're going to you're going to have to you're going to have to be innovative to get people, you're certainly going to look at pricing is starting to look at innovation in terms of our network allows us to be more innovative so that it is interesting stuff is tough as John mentioned.

Right at the time to do that is when you when you've got a fully.

Our fully loaded our bag of tricks, which we knew deed band 70, we do need lower cost phones, you wouldn't hit you wouldn't hit the gas on that today with one phone that's $899 right. So on the other hand, so we but we have FC we have FCC obligations that are that are focused on retail wireless and theyre not focus as much on maybe.

Some of the other things that we think.

Our network does so.

We didn't make the rules and.

And so we thought we.

We would probably approach it a little bit different way if it was all P&L.

But we have things in place to make sure that.

We can kind of walk and chew gum at the same time, we just meet the FCC obligations that all should make that a profitable business. So.

I think well.

We'll go a little bit more.

A little bit more detail on this on in.

In Vegas.

And then.

Yes, so maybe just in terms of the question around network sharing as it relates to the agency we.

We have a very strong collaboration with AT&T network sharing can take on many different flavors.

I would say that at this point in time, we continue to work very closely with them on how we utilize that network as a complement to our network both in market as well as out of market.

But you know we're looking at different options, there, but we don't have anything to announce as relates to network sharing with them.

And then in Canada.

Go ahead please.

Just in terms of the overall relationship you know obviously, we have a relationship on the <unk> side as well and they've been very good partners for us as we continue to load customers on AT&T. In addition to T mobile as it relates to the immuno.

And I was just going to follow up on that real quick if I could please with respect to the Doj settlement.

At the beginning of this dispute you settled you made this agreement with AT&T and made some commitments to AT&T in terms of longer term tenure revenue commitments with the expectation that it would happen very rapidly if the Doj settlement happens does that change your mind about how aggressively.

You want to migrate off the T mobile platform to AT&T.

Yeah. This is Charlie so that.

But we would hope what we'd hoped was that we would only have to upgrade customers one time right. So.

<unk>.

The early termination of CDMA and it took some it's taken some time to get our systems tied into AT&T systems. Obviously their systems are different than ours. So it's taken both parties are a little bit longer than we thought so.

Unfortunately, with CDMA shut off being accelerated we had to convert people to T mobile.

As our network, obviously wasn't up with handsets available. So we had ideally we would have waited to our network was up and we could have just converted people in our network. So by the accelerated timeframe. We then had to change people over to T mobile.

And to extent that just department does not approve or we don't get disagreement done with T. Mobile then yes, we would we would revert back to AT&T, but that would require another upgrade.

Then AT&T phone.

For the most part are in a wait until such time as we have for example band 70 in our phones in the fall so.

There's a lot of expense that we didn't expect there.

And.

And a lot of a lot of focus on operational things that our management team has had to deal with that we should that we didn't we.

We didn't maybe our fault or not foreseeing, but we didn't think there would be an issue.

With the proposed settlement so.

Sure they have good reasons and.

And so forth. It's just that we would it would be nicer, if we get a little bit more communication, a little bit more focus on it so but there's already damage done we hope that that that that will.

Well hopefully get that back under control. So the timing has been really bad for us, but like anything else. When you read the business you have you have speed bumps and you have to overcome it.

We're a company that that looks at what we can control.

Try to focus on what we can control and things we don't control like the government.

We have to deal with the cards that are get dealt to us.

Got it thank you guys for the questions.

On the network sharing stuff I mean, I do think that with that there are four players in the marketplace and were allowed to compete you know they are going to be opportunities for people to share networks.

Whichever whichever company share networks will have some cost advantage.

And so you you know I think we're always open to that because obviously were coming in remember something new and so there's things we don't have to build to somebody else has to some degree we're doing a little bit a little bit of that with AT&T today on the <unk> deal but.

But I think theres going to be other opportunities in them.

In the future.

Thanks, Charlie.

And our next question will come from Phil Cusick with Jpmorgan.

Hi, Thanks.

So hitting 20% of the country in five weeks seems pretty fast how developed is that commercial offer need to be to meet the requirement and why not ask for an extension given.

You've been dealing with for the last two years almost since you signed the deal.

Yes.

This is Charlie I mean that.

We don't think we need to ask for an extension at this point I mean, we.

We were fortunate that we ordered radios before kind of the supply chain kind of thing hit so we actually while we had some.

Ups and downs Fujitsu did an incredible job of making sure. We've got a radio so the thing that we don't control the thing that would maybe give us a little bit of as you backhaul in your power utility companies in backhaul providers or we are a little bit different kind of animal because they have experienced some of those kind of things, but we don't think we need to ask for an extension.

And we want to keep our nose to the grindstone and do what we said we're going to do.

And.

So we.

We're just going to get it done.

We have a can do attitude. This is a great project that we've been through it before this isn't their first rodeo in and we just go we're just give her head down I know you guys are a bit frustrated because we don't talk a lot about what we're doing but every minute that we're not in it.

Every day, we're not at a trade show.

<unk> conference talking about what we're doing and actually doing what we're doing.

This is further down the path, where we don't have to ask for an extension.

We're all excited to hear you talk about it.

Tuesday any previous electric.

Part of the question was it's not going to be robust offering.

The commitment that we have to make is we have to we have to do data.

We have to do.

Data, 20% of the population of the United States. So, it's not going to be robust offering as robust as we'd like a we're still waiting on justice too we have some roaming things that were part of the justice settlement that but.

Without justice approving.

<unk>.

It makes it a little bit more difficult for us and have a robust offering in the marketplace. Obviously, we don't have been 70, and we have high priced phones. So the main thing is to get the network up and operate and start put water through the pipes, making sure that we see how it works learn we haven't done this before so it's.

It's new to our company, although most of our team has done it before.

And ultimately our ability to compete is going to be the quality of the network and it's just not you will see that youll see more next week, but it's just not the quality. It's the architecture of the network gets its materially different than the legacy networks that are out there today and.

It.

It's a modern network in them and a modern world.

And we still have a lot of legacy and current networks.

I'm very impressed with how well they work.

And the incumbents are to be commended for how well they work, but man, they're complicated and theyre expensive and they are sluggish in terms of change so.

We're going to be different.

Any preview Charlie you can give us in terms of should we look for multiyear forecast in terms of revenue and cash flow should we expect other speakers aside from the fish.

Executives who've been have been announced.

I think it'll be just distant executives youre.

Youre not going to get a lot of youre not going to get a lot of guidance. We don't normally give guidance. We'll give you I think we will give you some high level things to to work off of it's not the last time, we're going to talk to you. We were cognizant of the fact that we need to do a better job of communicating and work and we're now to the point, where we've got some things to talk about so.

Some of the heavy lifting is done, but but youre not youre not going to walk away with the perfect model I think youre going to Youre going to walk away with with where things are where we think things are likely to go over the next several years.

And you'll be able to build a model from that but it's going to be.

Youre not going to have the kind of guidance you get from others. Because we just don't I mean, it worked for startup in that sense right and you know what I.

And I won't take you back we launched our first satellite and then we didn't give any guidance and we had our own internal plans of where we thought we're going to go and some of the plans. We we didn't have all the tools that we needed when we first started.

But we got better every day and in some cases, we blew by where we are we certainly long term blue by any forecast that we had internally.

It was actually my recollection was it was probably a little slower for six months and we thought it was going to be and then it was.

Like five times more than we ever thought it was going to be for five years or so.

You know, we're going to be prepared for the case.

Thanks, Charlie.

And our next question will come from Craig Moffett with Moffett Nathanson.

Thanks, So I guess since we're going to hear a lot more about the wireless business. Let me think about the legacy business for a second.

You talked about your your rural strategy, how much of your base today in the satellite TV business is still in rural markets or markets that I guess.

I would define rural meaning that they don't have access to.

Our wired broadband connection and as you see it.

All of the fiber overbuild plans from the frontier is in women's and everybody that are sort of increasingly targeting rural areas.

Do you think that's going to shrink over the next say five years or so.

Okay.

First yesterday.

The.

Eric will give you a more detailed craig but the majority of our customers do have broadband.

They just prefer.

The user experience I think what we have and maybe Eric will go in more detail.

But youre at year.

Your observation or where your theory, there's as with $65 billion of BARDA funding.

That's enough money to wire every remaining household in the country are get broadband every house in the country as long as you're not trying to put fiber 50 miles 20 miles or 10 miles or five miles out to every home. So I would expect that the.

That if the government spends that money wisely most people in the next you know.

Two or three years are going to are going to have broadband. So we have to make that user experience better than what you can get from from OTT and those kind of things.

You know I think I think there's going to be more competition for what we do for sure.

But.

We also have some things that we think that.

That we have that just make it a better experience for our customers. So Eric maybe you want to you're much closer to that than I am.

Yes, Craig this is Eric maybe just a bit more context, I mean, obviously, we've been talking about this specific strategy probably says.

Early 2016 and really focused on.

Redefining, our our target markets for the dish TV product.

And focusing in on kind of a a.

More rural customer.

So you're asking your question.

With the level of detail that we're not going to disclose however, what I would say is the.

The majority of our customers are in.

In Rural America.

As Charlie pointed out obviously, we think all customers are part of our past it may not be a wire, but obviously with the satellite broadband.

They can achieve connectivity.

It's really up to us to make that experience, great and I think.

Let's look at Youre, seeing and writing about and others the dirt.

To consumer marketplace.

You know is kind of exploding, however, we'll probably see some consolidation and.

Some aggregation of that content, we feel like the hopper platform, we've been talking about it for many years, where we have the ability to have Netflix on the box along with Amazon Prime in Youtube today.

Launch of our Android TV Hopper plus platform really allows folks to download a lot of other apps.

So the great thing about the Hopper as you know.

Not only can you skip those commercials, but.

And also you also have a whole whole whole home experience versus maybe a roku in one room and and Chromecast and another in you know a fire OS TV set. So you know I think Charlie's right I mean look at where we're we're eyes wide open on what's happening with broadband and competition.

But we're just going to do our best to target the right customer make sure they are profitable and.

And continue to build those customer relationships, whether it's dish TV.

We're sling TV or similar retail wireless products, So hope CNS, we correct.

I just squeeze in a follow up then is is Charlie cause because what you are where you. Both described actually is has fiber gets broader how does that inform your thinking about the fixed wireless broadband opportunity a lot of which would logically sort of target Rural America.

I guess, we'll probably hear more about that on Tuesday, but but how do you think about using your spectrum for fixed wireless in that context.

Yeah, So I think thats the good news Greg is that.

Let's assume that.

That if you took at extreme that everybody who had broadband in one satellite TV anymore.

We would now with our with our spectrum portfolio in our Rural America routes, we think that that there is certainly opportunity for fixed wireless in rural America. We're watching closely you know what T mobile and Verizon are doing I think its very creative.

In terms of what they're doing.

There's other maybe other ways to do it depending on where you are in the densities that you have obviously one of the things that.

It is now with the FCC Rulemaking is 12 gigahertz, which we think is an ideal frequency for for that there could be that could that you could get millions of customers in fixed wireless.

Particularly in Rural America So.

We're hopeful the FCC will.

I'll make some rulings on that.

And near order, but you know.

I think I think there's opportunity there.

And finally sort of way.

I think there is greater upside in fixed wireless in the wash we might have.

The bleed that you have in linear television.

Alright. Thank you I look forward to hearing more about it next week.

Thank you and our next question will come from Ben Swinburne with Morgan Stanley .

Thanks, Good morning.

Just maybe focusing in on two questions on the quarter.

You guys had have had really low churn in pay TV really through the pandemic.

It popped up this morning in the first quarter I think some of that was tagged maybe the price increase but could you talk about your expectations for churn as sort of we.

Hopefully finish coming out of Covid and whether that you think whats normal for that business. As you look ahead and then on the wireless side. Your service gross margins were down quite a bit I think you talked about the CDMA migration pressuring both <unk> and <unk>.

And data costs, but just some help in thinking about how much of that gets resolved.

As you guys hopefully get approval from the Doj.

Yes, Ben this is Eric I'll take the churn question.

To give you a little context around that obviously, we've been on a on a run rate of not only improving the customer experience, but you know lowering.

Customer churn, probably since $2014 $15 16 in.

Just talk to on the previous question about.

Our focus on the dish TV side regarding.

Really acquiring the right customer and making sure they're they're profitable and we're giving a great experience.

Say a couple of things like the last two years with Covid.

It is a factor and obviously I would say like you know churn rates and the.

The desire to switch.

Has been depressed slightly and you're seeing that kind of a bit throughout the industry. But there is also you've got you've got stimulus you have inflation you have a lot of factors that are happening what I would what I would tell you is there is no doubt there was a bit of a bump.

In Q1 because of the <unk>.

And obviously price increase.

But I would look for our run rate to be.

Closer to traditionally where we had been.

Pre COVID-19.

Okay Paul.

But no no.

I agree with that and then as it relates to the margins on our retail wireless you had three items that are giving you pressure you clearly have.

Significant CDMA migration costs that are hitting there we are seeing higher data usage and <unk>.

The favorable terms that we hope to get on the T. Mobile deal should also help that going forward. So you should see that degradation reverse in future periods.

Thanks, Paul.

Operator, we have time for one more before moving to the media.

Thank you we will now take our final question from the analyst community members of the media on the call. Please press star one now to enter the queue to ask a question.

We'll begin the media portion of this call following the answer to this final analyst question.

Our final analyst question will come from Walter Paycheck with liked yet.

And that was a lot of buildup for this last question.

Yes.

Got it.

Oh Geez, if I wanted to go back to Craig's question, you know talking about broad bandwidth with the pay TV customers.

You said majority already have it in obviously more getting it with broadband with fiber and fixed wireless.

And then Charlie Similarly back when you talked about shared networks, you're like Oh that makes sense over time so like.

It just seems obvious that.

A merger of Directv and dish is pay TV business should be happening given those market dynamics and similarly that you should do a shared network go with AT&T.

You yourself have control of doing that to a certain extent by pursuing it with these companies. So so rather than it feels like it's almost I guess that may happen, if they come to us, but like why not pursue it yourself.

[laughter].

You have good insight as well.

I mean.

You know I think I think we're comfortable running our company in private and not in the press.

And I think we're comfortable that we have a great business and a great future and I think we're comfortable that we're going to figure.

Things out it okay.

I don't know what else how to say it I mean, you you gain a lot of confidence over the years you work as a team as long as you know some of US in this room have you just get confidence that you that you can get to some of those places now not everybody works that way not every not every logical thing happens.

But.

Look that.

When anytime you can do something that both.

Good.

You bet.

Both companies are multiple countries can all benefit from that it's easy to have a conversation you can't always get something done, but it's easy to have a conversation what doesn't work as we're one one company gets all the benefit in one company loses that doesn't work well believe it or not there's still people trying to do those deals out there. We just don't spend a lot of time on them. So look.

Look I think I've, I've said that dish and Directv is inevitable.

And I think that there's I think there's opportunity.

But the number of companies not just agents either way.

Where you can where he could share.

<unk> assets are networks. It is a little bit more complicated because our network is as stand alone <unk> and it's not it doesn't have all the legacy hooks in it so.

It's not.

We don't you know.

It's very difficult for us to share legacy and when you've got a more modern network gets a little bit more difficult, but there are things that as Craig talked about and fixed wireless and things where that wouldn't be an issue because thats kind of a new.

A new a new build kind of thing so.

We're looking we're looking at all of those things so all I can say.

Alright. Thank you what I think rich wants to sneak one on again on his favorite topic.

Charlie.

Yes, rich the last word rusher on rich now yeah always you always get the last word.

Charlie.

Obviously, the video sub losses, not just from you, but the whole industry video sub losses are accelerating.

Streaming sub growth appears to be slowing pretty dramatically.

I guess from a high level it would be just great to get sort of your views on like what happens next.

Well.

I think the video I think the video just video content providers, we need to make they need to help us help them make the product better right.

If I'm.

This is a trend in the younger generation is there what if youre watching two hours a tech talk you're not watching two hours of discovery. So what you used to do.

And I prefer my kids watching discovery than tech talk so.

Maybe so.

Got to make the product better theres still the commercial load is still heavy the the.

They just we just do things in that.

That make it frustrating for customers.

Maybe for the bottom line, but make it and I think maybe we need a bit more of the.

We needed a little more.

T Mobile's unclear your approach to consumers in the video business.

You know we have a lot of ideas about that some people. Some people who are engaged on that some people have not but obviously as those trends continue for companies, which I think they will.

Just because I see a younger generation spending time on something other than traditional.

Content.

People will get innovative nothing nothing makes people and innovative.

More than.

Having a retrans reverse on them. So is there anything you've seen that is innovative to date.

Yes.

Yeah, I think theres a lot of innovation out there I think I think what happens is we all we bolt on a customer experience or user interface. How do you get to the content that you want and is that a fair price.

And how and.

And I think the biggest complaint we get Eric would have to be back closer to that to me, but the biggest complaint we get certainly on linear TV. For example is $15 16 minutes of commercials. So you get a little bit of history, you get a little bit of history and between the commercial so.

That's difficult to.

Yeah.

To watch and so I think we've just got to improve that we've got a pretty bright, but they make money from commercials, but at some point.

People are watching the commercials become less valuable in which case if people start to change I always like to get out ahead of that and maybe get there a year or two in advance of where I think things are going so.

I'm optimistic about about content, we've never had better content.

I think in the United States, and we do now and I'm optimistic that that people will pay for it and I think people give people good user experience.

I think that the companies can be very profitable, but I think theres a transition there and we're all going to have to feel our way around but were worst we're problem solvers. We think we can make our product better with the help of our content providers.

Alright, you have taken.

We've taken a <unk>.

Media medium.

Thank you we will now take questions from members of the media again, if you are a member of the media and we'd like to ask questions. Please press star one now to enter the queue to ask a question.

And our first media question comes from David Loeb with CNET.

Okay.

Hi, guys.

Hmm.

Two parter here first can you just give some example at at how this network is going to be different for the users and customers the mobile network than the legacy networks here describing against.

And the second one is.

Your project Genesis, a $30 a month tier is that going to be the rate going forward is that just promotional and when would you expect to raise it if ever.

Thanks, Dave for the question this is John <unk>.

Two things I'll start on the Genesis side.

So it's a project to bring on early users.

By definition, it's going to be short lived as.

As we transition to full commercial operations with our brands.

There may be a role for project Genesis longer term as it relates to our innovation programs.

But it's it's not our sort of full scale launch of our brand and offers that can be with the large incumbents.

As it relates to how we'll go about competing.

I don't think this is the right place for me to talk about what our strategy is.

Obviously, we don't want to.

Sort of telegraph, what we're going to do to the competition, but.

But generally we're preparing to scale up operations be competitive in the market and having our own network network will be transformative for our retail business as well as we enter an enterprise.

And Sir did you have any additional questions.

No.

If there was anything about that that network. The network itself that was different than legacy that you could sort of point out right now.

Yes.

Just adding to what John said.

Clearly, we're going to be competitive on the consumer side.

But a lot of the capabilities that we have within the network unlocked a whole new set of opportunities on the enterprise side of the business and as we've talked about in the past we think that there is significant potential.

With the enterprise business and the capabilities of our network actually enable that as we go forward.

Yeah.

Alright, thank you.

Operator, I think there's only one more in view.

Thank you and that question will come from John Simone tunnel with inside towers.

Hi, good morning, Thanks for taking the call.

When you put together a pretty impressive list of vendors too.

Put together your networks.

And you've acknowledged that it's a different network.

From the legacy networks, but.

Looking at the list of vendors and frankly, I've kind of lost track of how many are there actually are but we keep asking who's got the point and I know in the last quarter call you acknowledged that dish had to become its own systems integrator and I'm wondering if this deal announced with Samsung who has both.

Ran and core elements to it that might.

It might help streamline that execution on <unk>.

Setting up and delivering a network by having a large vendor with those kinds of skills to help us through.

Is that a fair assessment.

Thanks for the question, Jon I'll start off and then I'll kick it to Stephen.

For some additional context.

Yeah, we do view ourselves as a systems integrator.

We're working with many of the biggest names in tech and certainly in the.

The wireless space to bring this network together.

And we're going to continue to be the core integrator, but we're always looking at opportunities to improve our position.

Certainly the opportunity to bring in Samsung as additional random radio partner on.

On top of our existing robust relationship on the device side.

It was a really good opportunity for us and.

Obviously, we're getting better every day.

Serving an integrator capacity working with the partners.

And we expect to be able to plug Samsung sort of into our delivery machine.

They focus on execution across the board with.

The names that you've read in the press, Amazon, Cisco, Dell, Vmware <unk> or others.

Yeah.

One of the things that's great about our architecture is that we can bring in different pieces, where we see those opportunities because the entire architecture is open by definition. So a big focus on our boxing ourselves and Stephen anything you want to add there yeah and I think just picking up on what John said is we have an open architecture and so we are the systems integrator and we have an ability to <unk>.

Bring in vendors that fit within our ecosystem and I think it's very important to emphasize the fact that it is an open ecosystem and by definition that allows us to do that.

And as we've talked about in the past it is in Iran architecture.

And what was important is every partner we have.

I understand they're coming into this architecture, they fit within that framework.

<unk> is no exception and I think what's great about the relationship with Samsung is.

Is the David Bryson, Iran, and that was really important for us they've embraced our architecture and they are yet another partner that can bring capabilities to complement what we're doing I think another important factor in the timing for the Samsung.

Is the CBR spectrum as well as the TDD spectrum, we recently acquired in the last auction and that's really important and valuable spectrum for us their ability to bring massive mimo into our network and be able to tie TDD and <unk> together is another important consideration and just to clarify the timing. It is a ran vendor not our core vendor. So they can begin.

To bring in radio software as well as radios that will complement what we're doing with Fujitsu on the radio side as well.

Perhaps one more one more point to add is we've already completed some initial interoperability testing with the Samsung infrastructure and software with our existing ecosystem partners.

EMEA, where it would be at <unk> as well, so we've already down that path.

We're looking to deploy them later in the year in our network and going into 2023.

Operator, thank you and thanks, everybody for joining we'll see you next week.

Thank you that does conclude today's conference call. We do thank you for your participation have an excellent day.