DISH Network Corporation (DISH) Q3 2020 Earnings Call Transcript

DISH Network Corp  (NASDAQ: DISH) Q3 2020 earnings call dated Nov. 06, 2020

Corporate Participants:

Timothy A. Messner — Executive Vice President and General Counsel

W. Erik Carlson — President and Chief Executive Officer

Paul W. Orban — Executive Vice President and Chief Financial Officer

Stephen Bye — Executive Vice President, Chief Commercial Officer

John Swieringa — Executive Vice President and Group President, Retail Wireless and DISH Chief Operating Officer

Charlie Ergen — Co-founder and Chairman of the Board

Analysts:

Ric Prentiss — Raymond James — Analyst

Doug Mitchelson — Credit Suisse. — Analyst

David Barden — Bank of America — Analyst

Kannan Venkateshwar — Barclays — Analyst

Walter Piecyk — LightShed — Analyst

John Hodulik — UBS. — Analyst

Jonathan Chaplin — New Street — Analyst

Phil Cusick — J.P. Morgan — Analyst

Kutgun Maral — RBC Capital Markets — Analyst

Jonathan Atkin — RBC Capital Markets — Analyst

Scott Moritz — Bloomberg. — Analyst

Amy Maclean — Cablefax — Analyst

Presentation:

Operator

Good day and welcome to the DISH Network Corporation Q3 2020 Earnings Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Tim Messner. Please go ahead.

Timothy A. Messner — Executive Vice President and General Counsel

Good morning, everyone. Thanks for joining us. We are joined on the call today by Charlie Ergen our Chairman; Erik Carlson, our CEO; Tom Cullen, our EVP of Corporate Development; Paul Orban, our CFO and on the Wireless side we’ve got, Stephen Bye our Chief Commercial Officer; and we have John Swieringa, our EVP and Group President of Retail Wireless. Erik and Paul will have prepared remarks. But first let me take you through our Safe Harbor disclosures.

Statements we make during this call that are not statements of historical fact, constitute forward-looking statements and are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from our historical results and/or from our forecasts. We assume no responsibility for updating forward-looking statements. As part of the process for FCC Auction 107, we filed an application to potentially participate as a bidder for those Spectrum assets. Because of the FCC’s anti-collusion rules, we’re not able to discuss that auction and we will not be taking questions on that during today’s call.

Now I’d like to turn it over to our CEO, Erik Carlson.

W. Erik Carlson — President and Chief Executive Officer

Thank you, Tim and welcome everyone to the call. I hope you and your families are healthy and well. We appreciate you being with us today. Paul and I will keep our comments brief and leave plenty of time for your questions.

It’s been an exciting quarter. We acquired Boost Mobile on July 1st and entered into the retail wireless business. Saw growth in Pay-TV due to our continued discipline with DISH TV and through better execution and customer growth at SLING TV. We reported strong revenue numbers and brought in more than $1 billion a year OIBDA and we continue to make good progress with our wireless network build.

With the acquisition of Boost we made changes to our segment reporting, which you’ll see in the Q, as well as in our earnings press release. Paul will talk about those a little bit more in a minute. I’d like to highlight a few items across our business units.

With regard to the quarter, DISH TV performed well given the current environment. The gross new activations were approximately 202,000. Activations are down year-over-year primarily due to COVID and our approach to it. As I stated before the crisis has impacted customers’ willingness to respond to some of our marketing tactics like opening direct mail and in some cases a lot of technicians form services in their homes. As a result we have reduced our marketing expenditures and our gross new DISH TV subscribers have decreased. However, our DISH TV strategy has been anchored in acquiring and retaining long-term profitable customers. We’ve been focused on a more rural and higher credit quality customer base and we remain committed to this path.

In the quarter we saw DISH TV net subscriber loss of 87,000 customers. Our losses are primarily the result of lower gross new subscriber activations, partially offset by our lower DISH TV churn rate. Paul will have more detail on this in a moment. We’ve also placed a significant commitment to delivering best-in-class customer service and that work is paying off. We’ve been recognized for the third straight year by J.D. Power at number one in customer satisfaction. I want to thank everyone at DISH for keeping our customers top of mind and delivering the exceptional service, technology and value that we provide.

Turning to SLING. In the quarter we gained approximately 203,000 subscribers. This is encouraging news given the heightened competitive environment and a significant increase from the previous quarter when we lost customers. While the increase is primarily due to the return of sports in the third quarter, it was also helped by the enhancements we’ve made to the platform. We launched the beta version of SLING Watch Party, which has been well received. We’ve made numerous improvements to the overall user experience. And we’ve taken a more disciplined approach to attracting the right customers. With that said, we’ll continue to focus on acquiring and retaining profitable customers and delivering great experience for both DISH TV and SLING TV. We all know, we still have room to grow.

Now switching gears a bit, as a result of our Boost Mobile acquisition in the third quarter we officially entered the retail wireless business with more than 9 million customers. We now offer competitive retail wireless service as a mobile virtual network operator or MVNO. And while we build out our 5G broadband network, we will operate under an MVNO.

Retail wireless net subscribers decreased approximately 212,000 in the third quarter. This was largely due to our efforts to integrate the retail wireless operations and make certain operational changes to enhance profitability. We’re just getting started and will likely need another quarter to continue to implement changes that will drive better profitability, improve the customer experience and continue to focus on attracting and retaining the right mix of customers. And as I mentioned last quarter, our approach will be similar to what we did with DISH TV and what we’re now doing with SLING TV. We will implement a more disciplined strategy in acquiring and retaining high-quality profitable customers.

Our profitability is determined in part by what we paid to access the network as an MVNO. And as we roll out our own network we will begin to benefit from owner economics that will drive profitability and allow us to be more disruptive and drive better competition in the retail wireless space.

Now regarding our wireless network, we continue to make progress building the nation’s first cloud-native, open RAN compliant 5G network. Since the last call, we named several additional key vendors, including Nokia, Intel, Hansen Technologies, DigitalRoute, Blue Planet and Matrix Software, including our announcement with VMware in the third quarter. And both Charlie, Tom and Stephen Bye are here and are available to talk about our progress on wireless efforts.

Look, it’s a great time to be part of DISH and I want to express my gratitude to the entire team. We still got a lot of work to do, but I’m confident in our focus and our resolve. We definitely have room to grow and will continue to take a disciplined and innovative approach to the opportunities that lie ahead.

In closing, right now as we all observe every day COVID cases across the country are increasing. COVID has certainly become a part of our daily lives and a lot of work is going into taking care of our customers, taking care of each other and taking care of the communities that we serve. I appreciate our team’s focus on keeping our team, customers and community safe and I hope everyone stays well.

With that, I’ll turn it over to Paul for a little commentary on the numbers.

Paul W. Orban — Executive Vice President and Chief Financial Officer

Hey. Thank you, Erik. Before we get into the quarterly results, I want to address the changes we made to our financial reporting. We are now reporting operational results for both Pay-TV and Wireless segments. Our Wireless segment will report results for two separate business units, retail wireless in 5G network deployment.

Since we are now reporting segment operating results we are disclosing segment OIBDA as a measure of profitability for each segment. In addition, we have made changes to the line items in our P&L.

First subscriber related revenue has been retitled service revenue. Second, subscriber related expenses has been retitled cost of services. Third, satellite and transmission costs are now included in cost of services. Fourth — and fourth, subscriber acquisition costs are included in SG&A. We will continue to disclose the DISH TV SAC metric and that calculation remains unchanged.

In Q3, gross new activations were negatively impacted by COVID-19 and churn was positively impacted. As discussed in previous quarters, many commercial establishments are closed or running at reduced capacity. We put these accounts on pause or provide a temporary rate relief. These accounts represent approximately 250,000 subscribers and were removed from our ending Q1 subscriber count.

During the third quarter 35,000 of those subscribers restored service or had temporary rate relief band. These subscribers came back with minimal or no costs and were added to our ending subscriber count without being counted as a gross activation. In total, 80,000 subscribers have restored service or had temporary rate relief band. Of the remaining commercial accounts that were removed, 5,000 of these accounts disconnected in the quarter. We expect the majority of the remaining 148,000 commercial accounts to restore service in the coming quarters.

On a consolidated basis, our revenue and OIBDA are both up significantly compared to last year. Revenue has increased due to the Boost acquisition and OIBDA is up due to increased profitability in the Pay-TV segment.

Let’s dig into the details of each segment. Our Pay-TV revenue increased slightly due to higher ARPU, partially offset by our lower subscriber base. The increase in Pay-TV ARPU was mainly driven by price increases to both DISH and SLING.

Our subscriber margins for the quarter were positively impacted by reduced costs related to channel removals, including regional sports and multiple one-time programming adjustments. In addition, margins benefited from the cost cutting initiatives related to COVID-19.

DISH TV SAC per activation increased from $827 last year to $864, largely due to the increase in advertising cost per acquisition. SG&A expenses were down compared to last year as a result of reduced subscriber additions and the cost-cutting initiatives related to COVID-19.

Now let’s turn to our retail business unit. We closed the Boost Mobile and Ting acquisition on July 1st and August 1st respectively. As a result, we added over 9 million wireless subscribers. Service revenue was almost $1.1 billion and OIBDA was nearly $80 million for the quarter. We lost approximately 212,000 net wireless subscribers. We are currently in a process of integrating these businesses and making operational changes to enhance profitability, given our MVNO economics.

And lastly let’s look at our 5G network buildout reporting unit. We invested almost $50 million in opex and capex during the quarter. For the fourth quarter, we anticipate capex to remain at similar levels and increase substantially in the second half of 2021 as we ramp up our 5 G network deployment.

Our free cash flow of $651 million for Q3 benefitted from improved operational or operating performance in working capital. We ended the quarter with approximately $2.8 billion of cash and marketable securities.

With that I will turn it over for questions. Operator?

Questions and Answers:

Operator

Certainly. [Operator Instructions] And we’ll take the first at this time. It comes from Ric Prentiss from Raymond James. Please go ahead.

Ric Prentiss — Raymond James — Analyst

Thanks. Good morning or afternoon depending on where people are at. Glad to hear you’re making a speedy recovery, Tom, and you’re okay [Phonetic]. Our thoughts are with you. Question is, I appreciate the breakout by retail wireless and 5G. Can you update us a little bit on how many cell sites you think you’re going to need to build out the coverage that you’ve committed to? And how is it relating to the possibility to use some of the T-Mobile, Sprint decommissioned 20,000 sites that you get to take a look at?

Stephen Bye — Executive Vice President, Chief Commercial Officer

Yeah. This is Stephen Bye. We are on track to achieve the objectives as well as the commitments we made to the FCC and in terms of the 2022 timeline in terms of the 20% as well as the 70% in 2023. And so we’re on track in terms of deployment. We’re also looking at the sites that T-Mobile has provided to us to look at how we can reuse those sites as we go forward. So some of those sites are actually being included in the design, but we’re on track to the 15,000 that we committed to as a minimum build-out requirement for June 2023.

Ric Prentiss — Raymond James — Analyst

Okay. And any update as far as how you are moving towards offering postpaid service? And if that is going to be required within, say, a year?

John Swieringa — Executive Vice President and Group President, Retail Wireless and DISH Chief Operating Officer

Good morning everybody. It’s John Swieringa. And obviously it was a big quarter in Q3 acquiring and integrating two businesses. One of the reasons that we entered into a strategic transaction with Tucows for the Ting Mobile assets is it gives us some of the tools that we need out of 200 competes [Phonetic] in postpaid. We’ll certainly be focusing on that in the first half of 2021. But when you look at where we are we’ve got some work to do, build our team to assess the market. Obviously there is lots of opportunities in the industry and we have a lot to learn and take advantage of [Indecipherable] partnering with me to address our opportunities in the market as we go forward.

Ric Prentiss — Raymond James — Analyst

Okay. Thanks and good luck on the process.

Operator

Our next question comes from Doug Mitchelson from Credit Suisse. Please go ahead.

Doug Mitchelson — Credit Suisse. — Analyst

Thinks so much, Charlie, Tom and Tim. I guess a couple of questions. First, what’s your confidence at this point, Charlie. You made a ton of progress, line up all your vendors. But you can get them in the supply chain all working together up and running as you plan. When will you have a live market for proof of concept do you think?

Charlie Ergen — Co-founder and Chairman of the Board

Yeah, Doug. We will have some preliminary small markets in the first quarter. But we won’t have — it will be the third quarter before we have a major market up and running, probably the world can touch and feel a little bit to see what we’re doing. But I think the big picture, Doug, is that we’re running pretty fast internally. That’s not visible obviously to all of our investors and to the Street. And it’s not — there is so much detail and so many things that go into it. We strategically said we’re focused on just getting the job done.

And we — there is not great forms for us to communicate in the world of COVID because we’re — for us to show you what we’re doing, you really got to see it. It’s not a PowerPoint presentation. But rest assured that we’re really working on three things. One is we continue to build the team. We can’t accomplish what we want to comp that. We’ve got a great team and we have to hire people whose best days are ahead of them. We have to have people that have a lot of upside because as we grow — when we grow our growth will be dramatic and you got to have people that you can look at and put in other positions. So it takes a little longer to find the people whose best days are ahead of them.

We continue to work with our vendors and our partners either — and beefing up that team. Obviously there is a few areas that we still haven’t made announcements on and make sure they’re all track in the same direction and the same vision that we have. And we’re really pleased with the vendor group we’re working with today at all levels of their companies. And they’re taking a chance on us and we recognize that. And — but we all are in there. But this is going to pay dividends form them. And we’re all — we all take the approach that we’re going to help make their business better and they’re committed to help make our business better. So we’re building a great team of partners and vendors.

And then we’re planning on our build-out. Behind the scenes — it’s public that we have one tower up. But we are planning and really good networks starts with planning. And while we wish we had supply of radios today because we are ready to deploy in certain markets. We’re dependent on those O-RAN radios from Fujitsu. Those don’t arrive in mass till the second half of next year. So in the meantime, I think it allows us to get our planning done, our permitting done and then you’ll — compared to you, second half of next year they are running pretty fast. But behind the scenes we’re running fast now. We’re putting all those things in place to do that.

Doug Mitchelson — Credit Suisse. — Analyst

And the — I appreciate that. And then second question, Charlie, is as you said, I think you probably have a better wireless model than we all do. You’ve got a much better idea of what your operating cost per megabit is going to be and what it means for your ability to undercut the comments and take share and what your coverage and obligation looks like. I guess just for fun, you want to take a stab at what kind of market share of wireless you can get? Should we be targeting 50%? What should we circle in our models that might help us understand capacity and monetization potential for what you’re building?

Charlie Ergen — Co-founder and Chairman of the Board

The big picture, we look at businesses where we can build something that’s less expensive and better, less expensive and better. When you have both of those you can be successful in the marketplace. So we’re building a network that’s less expensive, both to build and to operate. But it’s one — it’s one more additional thing that we don’t always get that we’re going to get here, it’s going to be a lot more flexible because it’s cloud native, because it’s an O-RAN, open RAN system, because it’s 21st century architecture versus 30 years ago architecture, that network can do things that other networks can’t do. So the big mistake I think — so we’ll get — we’ll get our fair share of the consumer business.

With four major nationwide players, we’re going to get our fair share there. And that’s what, I know, you guys are concentrated on. But I think the other place that’s not as obvious is in the enterprise business where what we call slicer network, give people the option for a private network. That’s something that’s going to be relatively unique to DISH Wireless because the architecture allows us to do that.

And in that particular, in the private network side of the business that’s one where, I don’t know that we have competition for that. I mean we’ll have competition, but not the kind of competition for what we really can do. And so for us, as you might imagine, we’re going to go where the — where two things, where we get the highest price per bid but also where the utilization of our network is the highest. So the big economic thing if you — I haven’t seen they were in this model, but the biggest thing is when you have a network that the incumbents around about 25% of the network capacity. So if you look at a 24-hour day, seven-day week and you look at how many gigs that network could put out, how many are actually consumed, it’s a relatively low number. But if you have a more modern architecture where you can run that capacity more than 25%, maybe 30%, maybe 31%, the economics are pretty dramatic, maybe you can run your network at 50%. So that’s another place we look. And so that’s the gig economy, right.

Uber makes money, Drivezy makes money because it makes them use the car more, right because they use the car for lots of people instead of just parking at garage every night.

Our networks can be used by a lot of people, particularly on the enterprise private network business that most networks aren’t used for today and that’s a big difference. So that’s complicated and obviously we want to have customers and we don’t know what all those economics ourselves. We just know that there is a little bit less competition in that. So we will be a factor in the consumer business, but we will even a bigger factor in the private networks.

Doug Mitchelson — Credit Suisse. — Analyst

Pretty interesting. Thanks so much.

Operator

We’ll take the next question. It comes from David Barden from Bank of America. Please go ahead.

David Barden — Bank of America — Analyst

Hey. Guys. Thanks so much. Maybe just want to follow up, Charlie, on this conviction that you have that there is a plan that you guys have, but we don’t know that we’re all going to be surprised by. If you’re going to have one major market in 3Q ’21 and you need to get to 50% of the US population by June ’23, can you explain to investors how that happens? Convince us that it’s all going to be okay. Thanks.

Charlie Ergen — Co-founder and Chairman of the Board

Yeah. Okay. Good question. First of all, I hope — I know you want details, but we aren’t communicating. We’re building a very modern architected wireless network of 21st century. It does three things. All right. It’s open RAN technology. so we break apart the baseband in the radio, so there is no one company that controls this end-to-end. The network is much more virtualized than current networks. We are doing a lot with software where people today do hardware, right, and good analysts can look — we can go to a lot of detail where there is, but it’s a lot of software, less hardware and it’s cloud native, which means the vast majority of the network runs in the cloud. So there is lots of detail behind that. But if you can get your arms around that, you’re probably in pretty good space.

The reason — I think the thing you’re missing is that if you look at the build-out for us, which is obviously an execution challenge for us, it’s not a technical challenge, but it’s certainly execution challenge. The time to build a network is not to climb [Phonetic] the tower, which is what everybody is thinking about. The time to — when we look at the network planning, maybe Stephen who has done this for a living can pick up where I leave off here, the best time is in the planning and then you’ve got permitting and zoning and structural, but actual climbing of the tower and in a cloud-native network the provisioning is actually — is actually not — in other words — and so if you have your hardware at the base of the tower, you might — it might take you a year to get your planning, zoning, permitting to get ready. But when you climb the tower, you can do that in seven days. So the marketplaces is saying, oh, you’re looking at something it takes us seven days to do if we’ve done everything else correctly.

So — do you want to –?

Stephen Bye — Executive Vice President, Chief Commercial Officer

Yeah. And, David, we’re already well into the planning process. So when you look at sort of the activity level, the activity level actually started like months and months ago. So as Charlie talked about the market coming on air, we’re already in that planning phase and in the preparatory work as we go into the deployment phase. So we’re not starting now. We actually started months and months ago in that process. And the pipeline and everything that’s moving forward is with that target in mind. And in fact we’re looking to exceed the objectives that we have to make sure that we’ve got enough buffer in there to make sure we more than languish [Phonetic] FCC obligation. So we are well aware of that. Dave Mayo and I have been through this a number of different times. And we are in a very, very good position and very comfortable with where we are today.

Charlie Ergen — Co-founder and Chairman of the Board

Yeah. The one thing I’d add is that, the one that will become more visible to you will be obviously tower contracts. So obviously, there’s been a lot of negotiations there and obviously that’s a place where you at least will see some visibility. I’ve got contracts on my desk. There is still some issues, some people want to be more of a partner than other people. So we’ve got to take a look at that. But I think that’s the first visibility you’ll have that you’ll at least know that from a tower perspective that’s something. But the planning process, you’re just not going to get visibility to. And that’s — again that’s RF planning, zoning, permitting and structural, those things you just — you’re just not going to get visibility to.

And so that — and we can’t climb the tower until have radios. And we made the strategic decision to be open with O-RAN architecture. That is not something that some of the incumbent OEM radio manufacturers were ready to endorse in the United States today. So that did take us a little bit longer. COVID is not particularly helpful from that perspective. But we’re now — we’ve now cleared that hurdle technically. And actually that was — I thought that was the biggest risk to our whole program and now I’m sleeping pretty good at night because we have cleared that hurdle. So we know we can be an open network now.

W. Erik Carlson — President and Chief Executive Officer

Yeah, I’d also add that we’re aggressively hiring deployment teams in dozens of local markets around the country.

Charlie Ergen — Co-founder and Chairman of the Board

But running timeline, we run a timeline on what it takes to construct and just climbing the towers is actually one of the faster things, let’s put that way, it’s somewhere — we were very good on IoT. It used to take us sometimes take us a month from the time we started to the time we provisioned, because we were cloud native. And based on what we learn we’ll be materially better than that.

David Barden — Bank of America — Analyst

So, Charlie, thank you so much. That helps a lot. But I think another piece of the puzzle the people are wondering about is where the money comes from. If you don’t really have more than one big market up and running by third quarter next year, then we need to prove out the technology, you need to burn the commercial go-to-market strategy and then maybe money comes in to support this in ’22. Like what’s the financial [Speech Overlap]?

Charlie Ergen — Co-founder and Chairman of the Board

Good question, David. So a couple of things. One is we will have more than one market next year. Again what you can focus on and what we’re committed to is that we’re going to have 20% of the population by June of 2022, we are going to have 70% by June of 2023. So yeah, critical mass certainly by 2023.

The capital still — we’re still projecting $10 billion of capital spend, and you’re going to get to see every penny of that in our financials and how that spent. So you can see it. Having said that while initially we thought that $10 billion might be spent over three years, with the MVNO deal with T-Mobile, we have a nationwide network today. We have a use of a nationwide network today. And now we don’t have to monetize — we don’t have to wait till we build the whole network to monetize it.

So we get to build out market by market and monetize. And so the net effect of that is that $10 billion is stretched over seven years, instead of being stretched over three years. And we’ll try to give you more visibility to that in the future. But you saw we had $2.8 billion on balance sheet, we are $600 million of cash flow positive for the quarter.

The capital markets are open and it becomes a timing issue. Do you go to market with the most skepticism around what we’re doing or do you go to market when there is fewer skeptics, I would say. [Speech Overlap] what we’re doing. We could fail, right. But again we don’t spend our time and effort and capital for things we think are going to fail. And every day we get better. We build value every day. It’s just — it’s not going to — you’re not going to see it outside of our Company until obviously we deploy in major markets.

David Barden — Bank of America — Analyst

Thanks, Charlie.

Operator

We’ll take the next question. It comes from Kannan Venkateshwar from Barclays. Please go ahead.

Kannan Venkateshwar — Barclays — Analyst

Thank you. Charlie, just a couple of questions. So first is when we look at some of the comments you just made, you mentioned enterprise as a huge opportunity over time, bigger than retail potentially. And you also mentioned that T-Mobile’s network in effect gives you a way to scale retail, build up your cash flow stream and then fund your construction over time. But those two seem to be in contradiction with each other. If retail is not going to be a big business then can it really fund the build out?

And then more importantly, I guess is, when you think about the network itself, I mean there has to be at some point a cash flow breakeven because building up the retail business obviously is going to cost you a lot of money. And while you add the network, you have to spend an SG&A and so on. So when do you expect cash flow breakeven on the business even being built out 57% [Phonetic] of the network. Is it a few years after that. Does it coincide? If you could give us some insight around that that would be great.

And then the second question is under FTV. [Phonetic] What’s the main hurdle to that deal, if you could just expand on that, that would be useful. Thanks.

Charlie Ergen — Co-founder and Chairman of the Board

Well, that’s a lot of big questions. A, I think we’re cash flow positive in the wireless business this quarter. So — at least on the retail side. So — and that was unexpected — I said I have challenged our team for the first year with Boost to basically break even. We obviously have — the way we run our business with — when we pay for a network versus perhaps the way Sprint ran, there are differences. Certainly there are customers that are not economical to us and obviously we have to get — we are now on a lot of the Sprint systems. We got to put those systems in ourselves and John and team are working on that.

So I think that the retail business can — big picture is retail business can be a problem business, shouldn’t be a — should not be a negative business. I am not saying we’re going to have some ups and downs to get there, but it should be a — should actually be a very profitable business. And then the cost to building the network, again every day it seems to be a little less, but we’re still sticking with the $10 billion. And again it’s stretched over seven years. You can run the math. You can see — you can — I think a rational person can see how we get there. But again, we’re confident that we will be able to fund the network build.

Obviously after that, it’s execution risk that we have a better network, is it automated, is it cloud native, does it really do what we say we’re going to do. We do have that execution risk to prove that and prove to people actually want to — people want to analyze their data either privately or in public cloud, that we think that’s what people want to do. They do that in all sorts of markets today. That’s not done in the wireless business.

Yeah, we think that open RAN is a better architecture, we think it’s 21st century. We think that’s where the world will be three years from now. Are we wrong? May be. So should you build a — should you put a $5,000 cell site router box at a tower or should you do it in the software for $100, we think software is the better way. But we could be wrong. And maybe — I just think you’re going to see — do we think that it’s a national interest of the United States and we do think it’s bipartisan that we have more connectivity in the United States that’s controlled by American companies and less relying on foreign companies, we think that’s bipartisan. Maybe we’re wrong. Maybe people would rather have the foreign influence there.

Do we think that’s the exportable technology to the rest of the world? We do, but we could be wrong. So it’s — I know it’s difficult for investors to not have the visibility internally to everything that we’re doing. We certainly will be — we’re certainly not opposed to being transparent in China and why not [Phonetic] but we’re going to have to get to where people come in and visit us and see us, not a PowerPoint presentation on a virtual — we’re not going to convince anybody in this call. We didn’t convince anybody last call. We’re not going to convince anybody in the next call. But when the people who really do their homework come see it and visit us and visit our vendors then I think you’ll start to see the tide turning a little bit and there will be a few less skeptics. But we lived to this before. In 1992 when we said we’re going to go do digital nationwide, launch satellites, I don’t think there was anybody who thought — I think there were zero — I think there was 100% skeptics. And it was about 90% skeptics when we are in the launch pad. So it wasn’t until we demonstrated the product and put numbers on the board that some of that skepticism went away. So —

And then the other question was DIRECTV. I’m sorry I’m so long-winded today. DIRECTV, obviously, I’ve said publicly that I think the combination of those two companies is inevitable. The competition is not for us, it’s not DIRECTV, the competition is the actual programmers themselves that we deal with. They all have their own OTT products that they compete very well with what we do. It is in the consumers’ best interest that there will be scale as alternatives to that. But that’s a regulatory — that’s something where there has to be — I think that DIRECTV is or at least what I’ve read. So don’t take me as gospel on this, but they would like to deconsolidate that business and that they would like to do that before they would take any regulatory risk. Whether that happens or whether — how they do that or whether they do that, of course, remains to be seen. But make no mistake, whether it’s a year from now or 10 years from now, I believe it’s inevitable that those companies go together.

Kannan Venkateshwar — Barclays — Analyst

Thank you, Charlie.

Operator

We’ll take the next question. It comes from Walter Piecyk from LightShed. Please go ahead.

Walter Piecyk — LightShed — Analyst

Thanks. First up kind of a technical question for Stephen. Let me switch just to [Phonetic] radios are available whatever mid next year, if the anticipation that they will be capable of doing band 66, band 70, CBRS, C band, is it that flexible and are there going to be alternate radio liners [Phonetic]?

And then on a more touchy kind of feely question on the same concept, Charlie, when you think about this network that you’re going to launch in the second half of next year, are you basically — because when we talk to some of the vendors that you’ve hired thus far, we see that there is a tremendous focus on this network slicing and kind of enterprise and what future 5G applications can mean. Is the focus on the type of network you’re building to address that market and consumer will just be an obvious offshoot or is it the reverse where you’re building a consumer wireless market which also has the flexibility to do some of this network slicing and some of these enterprise applications that a lot of people seem to think is exciting with 5G?

Charlie Ergen — Co-founder and Chairman of the Board

Yeah, let me take your softball question first — software question first. We can walk and chew gum at the same time. They are proper network architecture. We’re building Netflix in a blockbuster world and obviously you are one of the guys that saw the Netflix. You actually understood Netflix probably years before most people did. So we’re building — it’s not that blockbuster didn’t work, it did. It just seems pretty archaic that you went to a store and had to rewind the thing just before you deliver bag and get late charge. And you’re talking to a guy who knows because we owned it and lost $100 million on it. So I’ll never do that again.

So I learned — we learned our lesson that we’re always going where the puck is going. So we’re building the next generation of where things go and it’s not that — it’s not that — and so the consumer is going to benefit from our network, it’s going to do things in a network that current networks don’t do. But the network is also designed architecturally that if somebody wanted a private network, they can have their own private network. And it would look like their own network. And so again not to get to the politics of this, but when the Department of Defense put their RFI up, our response to that is on our website. A couple of you people have read it. That basically shows you how the Department of Defense can have their own network.

And we already do that today. They already have their network when it comes to satellites. We are adding least capacity to the Department of Defense, they uplink, they encrypt it. They didn’t build the satellite, but they have every benefit of the satellite as if they did. It’s called a private network. Same thing can be done in wireless with the same architecture.

I’m not saying that — I don’t know politically whether the Department of Defense is going to go anywhere with what they’re doing. We don’t believe they should have their own use — we don’t believe they should build their own network because we don’t think they need to. But we do think that the technology allows them to do what they ask and we’re building that network. And part of the ideas and the architecture of our network was from their white paper two years ago. So we looked at what they — we are cognizant of what very sophisticated people in the Department of Defense would like to do. We just think there may be — we think there’s a lot of elements of logic to what they want to do. We think some things there that we don’t agree with. And not surprisingly, the incumbents don’t like that idea, because they can easily do what the Department of Defense wants. But forget the Department of Defense, think of Fortune 500 companies who might have that same need and then now you use your imagination.

Go ahead, Steve.

Stephen Bye — Executive Vice President, Chief Commercial Officer

Yeah, so Walter on the question regarding Fujitsu what Charlie said was that we’re going to hit the scale in terms of the delivery of those units next year. We’re obviously working very closely with them. We are actually going to take delivery of units before then. But they do support all of our brands and anticipated bands that we have in the future as well. So they’re very sophisticated radios there. I would consider them sort of on the leading edge in terms of the technology capability within the radio, but there were also an open architecture that allows us the support even CBRS as well as the existing bands we have today.

So n66, n70 and n71 even n29 and all the spectrum portfolio we have. So it’s a great radio. But they’re not the only radio vendor that we’re working with. We are working with other radio vendors. We just haven’t announced that at this point in time. And that goes a little bit to the architecture that we talked about in the white paper with the DoD. We can easily integrate other vendor radios into this architecture as well that allows us to provide those services on those other spectrum blocks as we go forward.

And then the other question, just to add a little bit of color to the slicing. The way we look at it is our retail customer base is essentially eight slices or uses eight slices on the network. And we can support whether it’s Boost or Ting or any other retail brand, we can support that as a slice on a network in conjunction with other MVNOs or other enterprise customers. So each of them can consume those slices. But we can also allow them to manage and set their own policy and manage that infrastructure as if it was their private network and Charlie spoke to [Phonetic].

Walter Piecyk — LightShed — Analyst

And I know it’s kind of a touchy-feely question, but I mean you read these books about disruptors and a lot of times there’s companies that focus on a new niche area to end up driving the cost down because they’re competing in a different version. And consumer becomes the offered. I guess the question, are you building for a network — slicing network or are you building for consumer network that network slicing happens to be a part of it? But it sounds like it’s the former from what you were just saying.

Stephen Bye — Executive Vice President, Chief Commercial Officer

Exactly, Walter, it’s the former. We’re building it with the slicing essentially as part of the DNA or the fabric of the network, which consumers wanted that. But that’s exactly how to think about it. And then the beauty of this architecture is it allows you to have that level of control, all the way from the radio through to any application in any customer segment. So that’s where it is a very disruptive architecture compared with most traditional networks and the networks that have been deployed today with other carriers.

Walter Piecyk — LightShed — Analyst

T-Mobile and Verizon or Verizon decided if they were going to make that change today and they want to switch to something to create a flexible network and they had to evolve a network, how many years do you think it would take them to accomplish that?

Stephen Bye — Executive Vice President, Chief Commercial Officer

Having been through multiple network upgrades and technology transitions, it is a multi-year approach. It’s not as simple as flipping a switch. As I say the architecture goes in the radio all the way through to the application. And then the other point to perhaps highlight is it doesn’t stop with the application. It’s also the OSS/BSS layer. And the choices we’ve made around the partners that we have in those layers of the network are equally as important as the radio decision. So the architecture of the OSS and the BSS is really, really critical to us being able to monetize the network and being able to support this capability. So oftentimes that’s ignored, but the vendors and the partners we have selected and that space also share our vision of what we’re doing as well.

John Swieringa — Executive Vice President and Group President, Retail Wireless and DISH Chief Operating Officer

Yeah. And I think — Walter this is John, I think from a disruption point of view, I think the market thinks that disruption is the lower price. And most of what we see in the marketplace today, particularly in terms of disruption is in fact marketing, right. My 5G is better than —

Walter Piecyk — LightShed — Analyst

Yeah.

Charlie Ergen — Co-founder and Chairman of the Board

— your 5G and my —

Walter Piecyk — LightShed — Analyst

Malfunctionality, yeah.

John Swieringa — Executive Vice President and Group President, Retail Wireless and DISH Chief Operating Officer

[Speech Overlap] whatever. I think it’s more functional. We went there with digital. The disruption for digital was we make — we can launch 100 channels of HD at one time that we could do an onscreen guide that was interactive that we could do DVR that skip commercials. That was real things. Because we were digital we could do that, you couldn’t do in an analog world. And so I think there is just — there are things that we will focus on from a consumer or an enterprise that will be disruptive from a feature point of view, but maybe not from the way that most people look at it today.

Walter Piecyk — LightShed — Analyst

Charlie, just a quick follow-up on sports. You’ve obviously proven that you can drop the RSMs and now everyone’s following you. But maybe just you’re always so good at kind of thinking about the kind of tectonic plates of the industry. What happens to sports? I mean the sports industry can’t survive on 45 million or 55 million subscribers sort of levels where the MVPD universe seems like it’s heading pretty fast.

Like as you look across your — you’ve been building out a broadband business or mobile broadband business like what should sports look like? I don’t think it works on a purely a la carte basis. So like what would your advice be if you were sitting at the sports leagues? What type of innovation would you like to see in terms of packaging?

Charlie Ergen — Co-founder and Chairman of the Board

That’s probably a little — that’s probably a little too broad for me. I don’t think sports are dead and I don’t think regional sports are dead. It was so unfortunate that Sinclair didn’t own the company when we negotiated a deal. I think that there were things that could have been done that weren’t — that neither company was able to do. So I’m not as pessimistic about it.

I think that things have to change and I think they changed in terms of new technologies and taking advantage of them and it changed in terms of features for the consumer, the consumer, they see value in. And I think you are not going to be able probably to get people who never watch sports to pay. I think you got to go where — I think you got to change that model.

For us, it wasn’t — we had real math that — we have real math when it comes to programing content, we know what the value is to our customers. As we said on many conference calls, the value of regional sports to our customers was the most overrated. I think we have some of those — still have some of that content that our customers are paying too much for. So it wasn’t a big risk on our part. But we haven’t given up on sports. We think it’s parts of the ecosystem. We think that some changes around the edges and maybe a fundamental change here or there and it’s a business that’s going to be around for a long time. It’s got the advantage of being live. It’s got the advantage of being interactive. It’s got the advantage of passion. And it just needs to be restructured a bit.

Walter Piecyk — LightShed — Analyst

Thank you.

Operator

The next question comes from John Hodulik from UBS. Please go ahead.

John Hodulik — UBS. — Analyst

Okay. Great. Charlie, just a quick follow-up on the DoD RFI. What do you think are the chances that that goes forward and that that contract becomes sort of a proof point or maybe an anchor tenant for you? And then I guess, obviously a lot of questions on network slicing and enterprise and wholesale. I mean, are there other discussions or other RFIs besides just sort of have a public one from the DoD that came out and are there discussions? Just trying to get a sense of what the demand is for network slicing or how quickly you think that that will materialize?

Charlie Ergen — Co-founder and Chairman of the Board

I don’t know the odds on it. I would say the DoD RFI was bad and we requested for information, let’s see where they go. I do know that the issue is bipartisan that network security in the United States, particularly if we can involve US vendors. We have made radios for 30 to 40 years in the United States. That’s a shame that all radios come from outside the United States. So it’s a national security issue. It’s probably some of the best dollars we can invest as a country. I don’t know that DoD needs to be involved. But we’ll see where that goes.

Demand for slicing, again private networks is what I really call it. You can use your imagination, but I guess I’d answer it this way. There isn’t a Fortune 500 company’s CEO that I talked to that their Board of Directors haven’t said what’s your 5G strategy. And what they really mean by it is they don’t really know what 5G means, but they really mean how do you use connectivity to improve your business, improve your product, to make it safer and you’re going to have to have — if you are a product company, you got a private network, you got advantages. If you’re a retailer, you have a private network, you have an advantage because you know your sales, you know your security of your parking lots, whatever it is, the use cases are endless.

And first of all, any field that call me, I’ll take the call. Second, I [Indecipherable] and our team will. And we’ll work with their people to make their business better. All right. And we will be tireless in that effort. And we don’t have to get 100% of the profits. We actually share. So we’ll see what happens. We are building something special. And we may fail, but we are building something special.

John Hodulik — UBS. — Analyst

Got it. Thanks.

Operator

We’ll take the next question. That comes from Jonathan Chaplin from New Street.

Jonathan Chaplin — New Street — Analyst

Thank you. Charlie, in the early days, you said that you weren’t going to start building the network until you knew who you’re building it for. But you would ultimately partner up with an anchor tenant that would be either sort of the first user of the network. Is that still the case? And if so, I think initially you had said you needed to get a commercial trial up and running before you sort of selected one of those anchor tenants. Is that something you would do after running a couple of small markets in the beginning of 2021 or is it something you have to wait until later in the year?

Charlie Ergen — Co-founder and Chairman of the Board

Answer is I don’t know the answer to those questions. We clearly will start with — there is — the Chinese philosopher said a journey of 1,000 miles start with the first step. So we’ll clearly start with a first step. That was last month when we built our first tower. That was the that step. We will have — we will have a — we have consumers on the network.

Today john is adding customers, today on T Mobile network, but through our Boost facility, so that’s the step. And we will have anchor tenant. That will be a step. But we will have many, many private networks on what we are doing. And I don’t know the exact timing on that. We don’t — all I can say is the way that we look at business is we look — our definition of partnership is that somebody helps — we help somebody make their business better and they help us make our business better and that is a fun way to do business and you can accomplish great things.

It’s not just about we send you a check. It’s not always about a zero-sum game. The thing that’s always frustrated me about programing agreements in Erik’s business is it’s almost always a zero-sum game. If a programmer comes in, they want to tell a rate, they want more money. Our customers don’t want to pay money more. So we fight for our customers. And you never have a discussion about how you can build a better product for the customer where maybe the programmer to make more money and we can give a better product to our customers. I think we’re going to be able to do that in the wireless business and it’s kind of a breath of fresh air.

And the only reason I say that is the timing gets muddier in terms of we know where we have to be and if we can’t get there with somebody we will at some point, we know that as we get better and better more and more companies will take a chance on us, because they are very successful, they are in the driver’s seat. And now somebody has got — the next guys has got a prime amount of driver’s seat. And so they got to ask themselves do they bet on DISH or do they stay in the same lines and hope like he only fail. I got a funny feeling that savvy management teams are going to bet on DISH.

Jonathan Chaplin — New Street — Analyst

Charlie, a more per day [Phonetic] question. In a year or two when that DIRECTV deal ultimately happens, are you a seller in that transaction or a buyer or you hoping to be both?

Charlie Ergen — Co-founder and Chairman of the Board

I would say this. I think Erik and team are the best managers — are the best in the business of managing that particular type of business. So I don’t know how a transaction takes place. But if it was me, I’d be looking for a DISH management team in some form or fashion.

Now don’t let that go to your head here [Indecipherable] this call something else.

W. Erik Carlson — President and Chief Executive Officer

[Indecipherable]

Operator

Our next question comes from Phil Cusick from J.P. Morgan. Please go ahead.

Phil Cusick — J.P. Morgan — Analyst

Hey, Charlie. Thanks. You have talked in the past about how [Technical Issues] local compute needs rather than having a real base station to be hosted on another company’s edge compute nodes. Does that still make sense for your initial deployment or is it still more of a long-term goal?

And [Indecipherable] while I have you the spot you just raised, how does that fit into the DISH strategy overall and any update on the FCC you’ve got [Indecipherable] issue outstanding and will probably come to the end of this FCC administration anyway? How should we think about that. Thanks very much.

Charlie Ergen — Co-founder and Chairman of the Board

We don’t have Mark on the call because he is in some high-level meetings, but obviously, he is the architect of what we’re doing. So he would be the right one. In general on the hedge it is — it’s a place where networks are going to go. There is economics that will drive the timing of that. But there’s no question that the networks are getting closer — will get closer and closer to the edge and just be a timing issues when the economics.

We’re in a very good position to put the network in the edge because we’re designing the architecture to do that. We don’t want to change anything to do that. The SPAC, it is one more — it’s a couple of things that is different than DISH. Shorter term in nature. So it’s taking a much shorter term focus than — we’re I’d like to say [Phonetic] to say we’re 13 years into a 15-year project in wireless. The SPAC is certainly looking at things materially shorter than that, certainly less than five years’ time frames in terms of businesses.

It is — we have a front-row seat to where the world is going in connectivity. We think there’s a lot of companies that can benefit from that. So the SPAC brings not only capital but brings, I think, strategic awareness. It gives — that particularly SPAC, maybe an advantage over some others that just bring capital. It is likely that this SPAC would look at companies that are peripheral to what DISH and EchoStar do. It is possible that there is some benefit to EchoStar and DISH from the SPAC. But the focus really is the profitability in the game and the increasing shareholder value in the SPAC regardless of how it might impact any other organization.

But we know a lot about video. We know a lot about satellites. We’re getting pretty darn good on the connectivity side and wireless side, particularly within the 5G world where we don’t have a legacy thought process. That’s unusual in a company in the world today. So we think there’s a lot of opportunity there.

The FCC, look these things have been on for a long time. It looks like we will have a change of administration. So that always slows things down. But it would be helpful the DBAs in terms of the conversations I’ve had with them, they’re ready to go out and start deploying and do things they need certainty. They’ve been in limbo for five years now and it’s a little bit unfair. The courts have said that that they get a chance to — they change the agreement. And I think they are anxious to move forward and are excited about what’s happening in the 5G. And obviously in any business, you’d like to have certainty, whenever that certainty is you’d like to have certainty. It’s just better than uncertainty. And I am hopeful whether it could be this administration at the tail-end or the next administration hopefully they get to come to decisions there.

Timothy A. Messner — Executive Vice President and General Counsel

Operator, we have time for one more from the analyst community.

Operator

The next question comes from Kutgun Maral from RBC Capital Markets. [Operator Instructions] Kutgun Maral, please go ahead.

Kutgun Maral — RBC Capital Markets — Analyst

Great. Thanks for taking the question. Two if I could. first Pay-TV side, DISH TV churn was fairly muted again in the quarter. I realize the pandemic was the primary driver, but some of it beyond that, are you seeing any discernible benefits from some linear competitive pressure easing whether it’s from the cable companies continuing to de-emphasize video a little bit or perhaps even at DIREC TV or is that mostly being offset by heightened competition from modern streaming services now in the market? And does it mean churns give you conviction in the ultra [Phonetic] opportunity ahead? And then I have a brief follow-up.

W. Erik Carlson — President and Chief Executive Officer

Yeah. Sure. This is Erik. I’ll take that. Look, we’ve been talking for quite some time on these calls about kind of our strategy and how we look at the the Pay-TV landscape, especially as it relates to DISH TV. So I think you’re right in your statement about pressures related to COVID. In my opening comments I talked a bit about the idea that switching has been maybe a tap down just a bit, because the pandemic. And obviously we’re managing that on the acquisition side and making sure that potentially we’re not as aggressive on keeping our powder dry there. We’re definitely seeing some of the benefits on the retention side.

There’s still lots of competition in rural America which has really been where our focus has been. We positioned DISH several years back now to really kind of refocus our efforts on high-quality customers that were profitable, that were more rural based. I think some of you have written about the idea that that is a proxy for less broadband. But we still see good competition from obviously DIRECTV and some of our maybe you call it smaller cable companies in rural America. But I think you’re seeing a benefit of not only our strategy on the churn side, but also a little bit from the pandemic and switching.

Kutgun Maral — RBC Capital Markets — Analyst

Great. Thank you. And if I could, I’ll just hand it off to my colleague Jonathan Atkin for a follow-up.

Jonathan Atkin — RBC Capital Markets — Analyst

Yeah. On the wireless network side, I might have missed it, but you get coverage targets for 2022, 2023 in terms of population. What does that translate in terms of cell sites needed to achieve that? And the comments that you made about kind of value in the Sprint sites, is that — have they presented you with a complete list or is that an ongoing effort where there’s more lifts that they’ll determine they need to discard and potentially offer up to you? Thank you.

W. Erik Carlson — President and Chief Executive Officer

Yeah, so I’ll start with the coverage requirement. It’s 20% of the pop by June 2022 and that’s our FCC commitment. We haven’t disclosed exactly how many sites that is. But you can pretty well do the math and our plans are substantially complete for that. The 70% objective is June 2023 and again we’re on — well on track to achieve that objective and that is a minimum of 15,000 sites. That’s the guidance we provided and we’re obviously looking to exceed that objective. So we have very healthy funnel and pipeline of sites that we can deploly to be able to achieve those objectives.

As it relates to the T-Mobile sites that we’re getting visibility of, that is a rolling forecast and we are — T-Mobile is providing that on a rolling basis. As they look at decommissioning those sites they are giving us visibility of those sites and we take that into consideration as we evaluate market-by-market, site by site, [Indecipherable] that is not a prerequisite for our design, we actually do our design. We do have plans independent of that, but then we take it into consideration as we look at candidates for those sites to see if they are a better option than what we otherwise have. So that’s the approach that we take.

Jonathan Atkin — RBC Capital Markets — Analyst

And then lastly as you begin the entitlement process that Charlie was talking about permitting and environmental municipal etc., do you need to have a lease in place with the tower company of rooftop host at the site or can you do that independently, having not finalized lease agreements at that particular site?

W. Erik Carlson — President and Chief Executive Officer

So what we do is we actually take into account all the candidate sites in their market for all the tower companies and all the rooftops that are available and that’s actually part of our design process to determine whether and how we factor the value of those sites into the design. So there is a process that we go through with respect to the permitting and the zoning and it varies market by market, locality by locality. But that is a consideration as we do the design and the site selection in weighted based on whether that’s an easy site or a hard site.

Charlie Ergen — Co-founder and Chairman of the Board

Yeah. This is Charlie. From a pricing point of view, we would expect, we are entering into master lease agreements with the tower providers. And then that we know — we know the context of each — we know the economics of each tower site, should Stephen come back and say that particular tower company site is the best one. We would already have — under our master lease, we would have the economics of that.

Timothy A. Messner — Executive Vice President and General Counsel

Okay. Operator, let’s move to the press please.

Operator

[Operator Instructions] Our first media question comes from Scott Moritz from Bloomberg.

Scott Moritz — Bloomberg. — Analyst

Great. Thank you. Charlie, wanted to get your reactions. T-Mobile, your brand enemy, competitor launched a TV service, online TV service this week that looks a lot like SLING TV, especially in the prices and the selection. Just wondering what your thought of that and how much of a rather competitive threat you might think that is?

Charlie Ergen — Co-founder and Chairman of the Board

Well, obviously, T-Mobile is a competitor of ours obviously and their video services is aggressive and competitive and maybe obviously there is one more competitor in a already crowded marketplace which is — obviously there are going deep into rural America, 99% of rural America or 99% of the country for their FCC. So we’ll have to be on top of our game to compete. They are obviously knocking the ball out of the park in terms of execution and their change in management is off to a great start.

So look, I’m just — I am [Indecipherable] that I get to be in the same that we — that we as a company, we get to compete against companies that good and that makes us better too. So Erik, you are the one that’s got to compete against that particular one.

W. Erik Carlson — President and Chief Executive Officer

No, I think you said that quite well, Charlie. Obviously it’s a very competitive product. it’s something that they’ve been working on a while since they acquired Layer3. And we’re just looking forward to try and compete against them.

Scott Moritz — Bloomberg. — Analyst

Thanks.

Operator

The next question comes from Amy Maclean from Cablefax.

Amy Maclean — Cablefax — Analyst

Hi. Yes. Thanks. I am afraid I have to ask you the retransmission consent question, but I think the Cox Media dispute has been going — the blackout has been going on for about four months or so now. I know there are some other — the former Northwest station too that has been running for a while. Are there any talks going on at all there is this something you are looking really for the courts to sort out?

Charlie Ergen — Co-founder and Chairman of the Board

Erik got a different answer to that. But I would say in general when somebody has been down for three, four months, it’s not likely they’re coming back. Because what happens is you lose the customer — if there is really somebody who want to watch that particular network and they’re gone. All right. they’ve gone out and found another — they put an offer intend on place, they’ve found an another alternative to find it, they are online finding it, they’ve got the Hulu or they’ve gone somewhere else, they have gone to a competitor.

If we weren’t willing to pay the price that they offered four months ago, we’re certainly not going to pay the higher price today than what we offered before because we don’t need customers who want to watch it. So it’s the same problem we got with regional sports. I mean I always tell, the program is dump, listen, if you come down, you got to get a crow bar to get back up in four months. It’s unusual that you would go back up unless there is some other prevailing reason why. A lot of those customers we put out there, they are getting — they really want the network, we’ve found a way for them to get it and they are sure they don’t want to pay for it twice. So that’s my conversation with programing. But Erik you have a different take on it maybe.

W. Erik Carlson — President and Chief Executive Officer

Well, Charlie, maybe I’ll give a just slightly different stance and Amy thanks for the question. I mean look Charlie is right and then obviously that’s that generally our viewpoint. I’ll just talk generally because we’re not going to really talk specifically about certain agreements or companies that we may be negotiating with. But, look, we’re always willing to listen and generally look at when a program comes down customers leave and they find alternatives. So when that happens, usually the content is worth less than it was before they went down. But look we always want to listen. We’ll do what’s right by the company, by our customers and our shareholders.

Charlie Ergen — Co-founder and Chairman of the Board

And we have real metrics. We know the customers returned as a result of takedown. We prefer not to have a takedown. We pay retrans, right, we know what the market price is for retrans, so if somebody is materially higher, that doesn’t make sense to us. I mean we are economic animals. We have real data. There’s real science behind us.

W. Erik Carlson — President and Chief Executive Officer

I mean, Amy, you’re just seeing if there is just a lot more, especially if you’re a connected customer there is a lot more places to get the content. And Charlie alluded it before whether programmers with direct to consumer offerings they have very similar programming or the same programing or slightly delayed. So those things all have to go to our equation.

Charlie Ergen — Co-founder and Chairman of the Board

And I’m empathetic to the local broadcaster because they’re getting squeezed from the networks themselves with reverse retrans and and declining viewership and on the other hand, the marketplace is saying we can’t pay more for your channel. And so they’re kind of — and that’s where a partnership really works where you look at it and say how do we both get better. But that’s not usually the way broadcasting contracts go or programing contracts go which is a shame. But I’m very empathetic to the situation there. And I understand why they would — why they are asking what they are asking. It’s just not economic reality.

Amy Maclean — Cablefax — Analyst

Is more cash is something you all are looking at or promoting in anyway?

Charlie Ergen — Co-founder and Chairman of the Board

We’re not — their customers look at it, it’s an alternative. We don’t have visibility into how they’re doing. But we know that customers look at it. For some customers, it’s our understanding that some customers that’s — that’s a choice that they make and the app — just as we have Netflix and Prime that application is on our set-top box and customers can click on it and watch it for free.

So you can understand what. You can understand the economics of the business have changed. And that’s just one case, but we are active with offer antennas, that we control, that we can go in and we can make that available to customers. For some customers that’s a very attractive option and they — just as the law has always been the broadcasters are required to provide it for free to somebody who puts us an antenna. So there is a limit on what they can charge is all I’d say and sometimes — sometimes there’s an honest disagreement on what that price should be, with a couple of people who are in that honest disagreement stage. One more maybe.

Timothy A. Messner — Executive Vice President and General Counsel

I think this is it. Operator, are there any other other questions?

Operator

It appears there are no further questions at this time and that ends our question-and-answer session for today. I would like to turn the conference back over to Tim Messner for closing remarks.

Timothy A. Messner — Executive Vice President and General Counsel

I think that’s it. Everybody have a great afternoon. We’ll see you next quarter.

Operator

[Operator Closing Remarks]