DISH Network Corporation (DISH) CEO Erik Carlson on Q3 2020 Results – Earnings Call Transcript


DISH Network Corporation (NASDAQ:DISH) Q3 2020 Earnings Conference Call November 6, 2020 12:00 PM ET

Company Participants

Tim Messner – Executive Vice President & General Counsel

Erik Carlson – Chief Executive Officer

Paul Orban – Chief Financial Officer

Charlie Ergen – Chairman

Stephen Bye – Chief Commercial Officer

John Swieringa – EVP and Group President of Retail Wireless

Conference Call Participants

Ric Prentiss – Raymond James

Doug Mitchelson – Credit Suisse

David Barden – Bank of America

Kannan Venkateshwar – Barclays

Walter Piecyk – LightShed

John Hodulik – UBS

Jonathan Chaplin – New Street

Phil Cusick – JP Morgan

Kutgun Maral – RBC Capital Markets

Jonathan Atkin – RBC Capital Markets

Scott Moritz – Bloomberg

Amy Maclean – Cablefax

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 would like to turn the conference over to Tim Messner. Please go ahead.

Tim Messner

Good morning everyone. Thanks for joining us. We’re joined on the call today by Charlie Ergen, our Chairman; Erik Carlson, our CEO; Tom Cullen, EVP of Corporate Development; Paul Orban, our CFO; and on the Wireless side we’ve got Stephen Bye, our Chief Commercial Officer and we’ve John Swieringa, our EVP and Group President of Retail Wireless.

Erik Eric and Paul 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 that are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from historical results and/or from our forecast. 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 FCCs anti-collusion rules, were 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, Eric Carlson.

Erik Carlson

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’ve acquired Boost Mobile on July 1 and entered into the retail wireless business, saw growth PTV due to our continued discipline with DISH TV and through better execution and customer growth with 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 built. 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 292,000. 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 filter 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 or 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 a lower DISH TV churn right. 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 as number one in customer satisfaction. Look, 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 to the significant increase from the previous quarter when we lost customers. The increase is primarily due to return to sports in the third quarter which 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 or retaining profitable customers and delivering a 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. While we build out our 5G broadband network we’ll 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 of continued 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. As I mentioned last quarter, our approach will be similar to what we did with DISH TV and what we’re now doing Sling TV. Implementing more discipline strategy and acquiring or retaining high quality profitable customers. Our profitability is determined in part by what we pay to access the network as an MVNO. And as we roll out our own network, we’ll begin to benefit from older 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 OpenRAN compliant 5G network. Since the last call, we named several additional key vendors, including Nokia, Intel, Hansen Technologies, DigitalRoute, Blue Planet, and MATRIXX software, including our announcement with VMware in the third quarter. And both Charlie, Tom and Steven 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 on our focus and on our results. We definitely have room to grow and we’ll 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 has gone 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’s doing well.

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

Paul Orban

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 re-titled service revenue. Second, subscriber related expenses has been re-titled 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 build out 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?

Question-and-Answer Session

Operator

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

Ric Prentiss

Thanks, good morning, good afternoon, wherever people are. Glad to hear you make your way to the COVID time. Okay, faster with my questions. I appreciate the breakout of details in 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 we’re committed to? And how is it related to the possibility to use some of the T Mobile sprint decommissioning 20,000 sites that you get still look at.

Stephen Bye

Yeah. So this is Stephen Bye. We are on track to achieve the objectives, as well as the commitments we made to the FCC 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 the 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

Okay, can you update us also how you’re moving towards postpaid service? And that is going to be recorded within a year.

John Swieringa

Good morning, everybody, John Swieringa. 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 two cows for the T-Mobile assets, because it gives us some of the tools that we need to enter and compete 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 to build our team, to assess the market. It’s been obviously, there’s lots of opportunities in the industry. And we have a lot to learn and take advantage of. Stephens Stokols is in town. He’s going to be partnering with Bing to address our opportunities in the market as we go forward.

Ric Prentiss

Thanks, gentlemen. Good luck on the process.

Operator

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

Doug Mitchelson

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

Charlie Ergen

Yeah Doug, we’ll have some preliminary small markets in the first quarter, but we won’t have poor – it’ll be the third quarter before we have a major market up and running probably the worlds can touch and feel a little bit that 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’s so much detail and so many things that go into it. We’ve strategically said we’re focused on just getting the job done. And we – there’s not great forums 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 make 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 accomplish without a great team, and we have to hire people whose best days are ahead of them, we have people, people that have a lot of upside, because as we grow – when we grow, our growth will be dramatic. And you’ve 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 in beefing up that deal, obviously, there’s a few areas that we still haven’t made announcements on, and make sure they’re all tracking the same direction at the same vision that we have. And we’re really pleased with the vendor group we’re working with today.

It’s all levels of their companies and they’re taking a chance on us and we recognize that and – but we all are in there, and is this going pay dividends for them. And 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 our build out. Behind the scenes that – it’s published, and we have one tower up, but we’re planning it and a really good network 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, that allows us to get our planning done our permitting done and then it’ll appear to you, second half of next year, they’re running pretty fast. But making it behind the scenes running fast now are putting all those things in place to do that.

Doug Mitchelson

I appreciate that. And the second question, Charlie, as you said, I think you probably have a better wireless model and 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 propagation 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 model that might help us understand the capacity and monetization potential for what you’re building?

Charlie Ergen

Yeah, Doug, big picture, we look at businesses where we can build something that’s 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 more additional thing 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, OpenRAN system, because its 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 a fair – 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 we can ask what we call slicer network or 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 we’re – 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, the part 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 anybody running this model, but the biggest thing is when you have a network that the incumbents run about 25% of their network capacity. So if you look at it 24 hours a day, seven days a week and you look at how many gigs that network could put out and 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 it’s 31%, that the economics are pretty dramatic. Maybe you can run your network of 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 parked in the garage every night. Our networks can be used by a lot of people, particularly in the enterprise, private network business that most networks aren’t used for today and that’s a big difference. That’s complicated. And obviously we want to have customers and we don’t know what all those economics ourselves, we just know that that there’s a little bit less competition in that so. So it will be a factor in the consumer business, but will be even a bigger factor in the private networks.

Doug Mitchelson

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

Hey, guys, thanks so much. I maybe just want to follow up Charlie on this, this conviction that you have that there’s a plan that you guys have, 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

Yes. Okay. Good question. First of all, I hope we’re – I know you want details, but we are communicating, we’re building a very modern architected wireless network the 21st Century does three things, right. Its OpenRAN technologies we use, so we break apart the baseband, and the radio, so there’s no one company that controls us end-to-end. We virtualized – the network is much more virtualized than current networks, we do a lot with software where people today do hardware, right and good analysts can look at you like – we can go in a lot of detail where there is, but it’s a lot of software, less hardware. And it’s cloud-native, which means massive majority of the network runs in the cloud. So there’s lots of details behind that. But if you can get your arms around that you’re probably in pretty good space.

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

Stephen Bye

Yeah, David we’re already well into the planning process. So when you look at sort of the activity level. The activity level actually clouded like months and months ago. So Charlie talks about the market coming on air. We’re already in that planning phase and in the preparatory work as we go into the deployment site. So we’re not starting now, we actually started months and months ago on 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 accomplish the FCC obligation. So we’re well aware of that. Dave Mayo and I’ve been through this a number of different times. And well we’re in a very, very good position and very comfortable with where we are today.

Charlie Ergen

Yeah, the one thing I’d add is that the one that will become more visible to you will be, obviously power contracts. So obviously, there’s been a lot of negotiation there. And obviously, that’s a place where you’ll at least – will see some visibility. I’ve got contracts on my desk, there’s 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 nothing, but the planning process, you’re just not going to get visibility to that. Again, that’s higher 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 till we 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 are ready to endorse in the United States today. So that did take us a little bit longer. COVID’s 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.

Stephen Bye

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

Charlie Ergen

But you run a timeline – if you run a timeline on what it takes to construct and you’ll just – the climbing the tower is actually one of the faster thing, let’s put it that way. It’s somewhere – we were very good in IoT, used to take us – sometimes take us a month, the time we started, the time we provision, because we’re cloud-native and based on what we learned will be materially better than that.

David Barden

So Charlie, thank you so much. That helps a lot. But I think another piece of the puzzle that 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 you need to prove out the technology or you need to burn in the commercial go-to-market strategy. And then maybe money comes in to support this in 2022, like, what’s the financial –

Charlie Ergen

It’s a good question David, so a couple things. One, we’ll have more than one market next year. I don’t want to – well again, what you can focus and what we’re committed to is that we’re going to have 20% of the population by June of 2022. We’re going to have 70% by June of 2023. So you have critical mass maybe 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’s 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 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 monetize.

And so the net effect of that is that $10 billion is stress over seven years, instead of being stressed 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 in the balance sheet, we were $600 million of cash flow positive for the quarter. The capital markets are open. And – but becomes a timing issue to you go-to-market with the amount of skepticism around what we’re doing? Or do you go to market when there’s fewer skeptics, I would say. There’s less with what we’re doing. We could fail, right. But again, we don’t spend our time and effort and capital for things we’re thinking we’re going to fail. And in every day, we get better. We build value every day. It’s just – you’re not going to see it outside of our company until obviously, we deploy in major markets.

David Barden

Thanks, Charlie.

Operator

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

Kannan Venkateshwar

Thank you, Charlie, just a couple of question. So first is when we look at another comment you just made. You mentioned enterprise as we go 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 prepay 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 on the retail business obviously is going to cost you a lot of money. And while you have the network you have to spend on AT&T and so on. So when do you expect cash flow breakeven on the business, even when you’re build out 50%, 70% of the network a few years after does that the coincide, if you could give us some insight around that that would be great? And then the second question is on DirecTV, what’s the main hurdle to that deal? If you could just expand on that that would be useful. Thanks.

Charlie Ergen

First of all big question, yeah, hey, I think we are cash flow positive in the wireless business this quarter. So at least in the retail side, so – and that was unexpected – I set out a challenge to our team for the first year with boost to basically break even, we obviously have – the way we run our business with an input – when we pay for a network versus perhaps [indiscernible] would be – there are differences, sorry, there are customers that are not economical to us. And obviously, we have to get that – we are now on a lot of 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 – big pitcher is retail business could be a profitable business, shouldn’t be negative –should not be a negative business. I’m not saying one has the months and bounds to get there. But it should be a part of – should actually be a very profitable business.

And then the cost to build the network again, every day seems to be a little less, but we’re still sticking with the $10 billion. And again, it’s stressed 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 that network bill. Obviously, after that its execution risk, do we have a better network? Is it – 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 that people actually want to – people analyze their data, either privately or in the public cloud. 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, yet. We think that OpenRAN 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? Maybe.

So should you build – should you put up $5,000 sale side router boxes at a tower? Or should you do it software for 100 bucks? We think software is a better way, but we could be wrong. And maybe I just think you’re going to see – did we think that it’s a national interest in 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 reliant on foreign companies. We think that’s a bipartisan, maybe we’re wrong. Maybe people would rather have the foreign influence there. Do we think that exportable technology to the rest of the world? We do but we could be wrong. So it’s a – 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 and shining a light on it. But we’re going to have to get to where people come in and visit us and see it. 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 get into by 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 turn a little bit. It’ll be a few less skeptics. But we lived through 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 was zero. I think it was 100% skeptics and it was about 90% skeptics when we were 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 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 product that they compete very well with what we do. It’s is in the consumers best interest that there be scale as alternative to that. But that’s a regulatory – that’s something where there has to be, I think that – I think the DirecTV is, or at least what I’ve read, don’t take me as gospel on this, but that they would like to consolidate 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 those companies go together.

Kannan Venkateshwar

Thank you, Charlie.

Operator

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

Walter Piecyk

Thanks. I first have kind of a tactical question for Stephen. When these radios are available, whatever mid next year, is the anticipation that they’ll be capable of doing band 66, band 70, CBRS, C-band license, is it that flexible? And are there going to be alternative radio manners? 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, to see that there’s a tremendous focus on this network slicing and 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 subject?

Charlie Ergen

Let me take your softball question first – sorry, software question first. We can walk and chew gum at the same time, the proper network architecture. We’re building Netflix and the blockbuster world. And obviously, you weren’t the guys that saw Netflix, you actually understood Netflix, probably years before, most people did. But we’re building something – it’s not the net – it’s not the blockbuster didn’t work it did, it just seems pretty archaic, that you went to a store and had to rewind, the thing to 40 delivered it back get late charge, and you’re talking to a guy who knows, because we own didn’t last 100 million bucks on it. So I’ll never do that, again, we’re up. 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 – and so the consumer is going to benefit from our network, it’s going to do things in the network that current networks don’t do. But the network is also designed architecturally that if somebody wanted a private network, they could have their own private network, and it would look like their own network. And so again, not to get the politics of this, but when the Department of Defense put their RFI out, our response to that is on our website, a couple of people have read it, that basically shows you how the Department of Defense could have their own network. And we already do that today. We already have our network when it comes to satellites. We already leased capacity to department fence, the uplink been encrypted. It’s not 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 views. 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 were cognitive so what very sophisticated – big sophisticated people the Department of Defense would like to do, we just think there may be so – we think there’s a lot of elements of logic to what they want to do. We think some things that are there we don’t agree with. And not surprisingly, the incumbents don’t like that idea because they can’t easily do what the Department of Defense wants. But forget the Department of Defense, think of us – think of the Fortune 500 companies who might have that same need. And then now you use your imagination.

Stephen Bye

Yeah. So Walter on the question regarding Fujitsu what Charlie said was we’re going to hit the scale on in terms of the delivery of those units next year. We’re obviously working very closely with them. We’re actually going to take delivery of units before then. But they do support all of our bands 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 of in terms of the technology capability within the radio, but they’re also an open architecture that allows us to support even CBRS, as well as the existing bands we have today in n66, n70, n71, even n29, and all the spectrum will probably we have, so it’s a great radio, but they’re not the only radio vendor that we’re working with.

We’re 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 slice thing, the way we look at it is our retail customer base is essentially a slide so they as a slice 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 our network in conjunction with other MVNO’s or other enterprise customers so each of them can consume those slices. We can also allow them to manage and set their own policy and manage that infrastructure as if it was their private network.

Walter Piecyk

I know it’s a kind of a touchy-feely question. But if you read these books about disruptors, and a lot of times, there’s companies that focus on a new niche area that end up driving the cost down because they’ve competed in a different version, then consumer becomes the offered. So I guess that was the question. Are you building for a network slicing network? Are you building a 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

Exactly what the – we’re building it with the slicing – essentially, is part of the DNA or the fabric of the network which [indiscernible]. That’s exactly how to think about it. And that the beauty of this architecture is allowing 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

T-Mobil’s rising to liberalize and decided that they were going to make that change today, and they want to switch to something to create a flexible network, and it’ll evolve the network, how many years do you think it would take them to accomplish that?

Stephen Bye

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 from the radio all the way through to the application. And then the other point that perhaps highlight is, it doesn’t stop at the application. It’s also the OSS, BSS wire. And the choices that we’ve made around the partners that we have in those layers of the network are equally as important as a radio decision. So the architecture, 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 with the vendors and the partners we have selected in that space also share our vision, corporate doing as well.

Charlie Ergen

And Wall, this is Charlie. I think, from a disruption point of view, I think the market thinks of disruption of is the lower price or – 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 you 5G and my functionality, whatever. I think it’s more functional, we went through with digital that. The disruption for digital was we make – we can launch 100 channels of HD at one time, that we could do an on-screen 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 analogue world. And so I think there’s 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 a – the way that most people will get it today.

Walter Piecyk

Charlie, just a quick follow up on sports, you’ve obviously proven that you can drop the RSNs and now everyone’s following you. But maybe you’re also 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 or 55 million subscribers, sort of levels where the MVPD universe seems like it’s heading pretty fast. Like, if you look across your – you’re building out a broadband business on a mobile broadband business like, what should sports look like? I don’t think it works on a purely ala 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

That’s probably a little a little too broad. I don’t think it sports are dead. And I don’t think regional sports are dead. It was so unfortunate to think that Sinclair didn’t own the company when we would negotiate and deal that was – I think that there were things that could have been done that weren’t. They would need a company that was able to do. So I’m not as pessimistic about it. I think that things have to change. And I think that they change in terms of new technologies and taken advantage of and change in terms of features for the consumer, the consumers that they see value in. And I think you’re not going to be able probably to get people who never watch sports to pay, I think you got to go where the – I think you got to change that model. For us it wasn’t a – we had real math that – we have real math, when it comes to programming 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 thing we have some of those customers – still have some of that content that our customers are paying too much for. So it wasn’t a big risk in our part, but we haven’t given up on sports. We think it’s part of the ecosystem. We think that changes around the edges, and maybe a fundamental change here there and it’s a business is 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.

Walter Piecyk

Thank you.

Operator

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

John Hodulik

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 contract becomes a sort of a proof point or maybe an anchor tenant for you? And then I guess, obviously a lot of questions on slicing and enterprise and wholesale? Are there other discussions or other RFIs, besides this one, this sort of fairly public one from the DOD that came out and other discussions and just trying to get a sense of what the demand is for network slicing or how quickly do you think that will materialize?

Charlie Ergen

Yeah, I don’t know the odds on it. I would say the DOD RFI was bad a request for information. Let’s see, where are they go? I do know that the issue is not bipartisan that network security in the United States, particularly we can if we can involve US vendors. We haven’t made radios for 30 or 40 years in the United States. That’s a shame, there are 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 the 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 the fortune 500 companies CTO that I talked to, that their Board of Directors haven’t said what your 5G strategy, and what they really mean by – 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 a – if you’re a car company, you got a private network, you got to an advantage. 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 companies, they’ll call me, I’ll take the call. So I can I’ll meet him anytime, anyplace, and our team will and we’ll work with their people to get make their business better, right. And we’ll 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. But I know – we are building something special. And we may fail, but we are building something special.

John Hodulik

Thanks.

Operator

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

Jonathan Chaplin

Thank you. Charlie, in the other days, you said that you were not going to start building a network until you knew who you’re building it for that you would ultimately partner up with an anchor tenant that would be the sort of the first user of the network. Is that still the case? And if so, I think initially you 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 that has to wait until later during the year?

Charlie Ergen

The answer is I don’t know the answer to those questions. We clearly will start with – there’s an old Chinese – the Chinese philosopher said a journey of 1000 miles starts with the first step. So we’ll clearly start with a first step, last month, when we built our first tower. That was this step. We’ll have a – we have consumers on the network. Today, John is adding customers today on the T-Mobile network, but through our Boost facilities. So that’s a step and we’ll have an anchor tenant, that will be a step, but we’ll have many, many private networks on what we’re doing. And I don’t know the exact timing all 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 else – 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 it’s a – you can accomplish great things. It’s not just about we send you a check. And it’s not always about a zero-sum game, it’s – the thing is it’s always frustrated me about programming agreements in Erik’s business. It’s almost always a zero-sum game, very few –a programmer comes in, they want rate, they want more money.

Our customers don’t want to pay more money. 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 can make more money and we can give a better product to the customers. And we’re – 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 when – 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 will – but at some point, we know that as we get better and better, more and more companies will take a chance on us because of our successful they’re in the driver’s seat. And now somebody’s got to prime – the next guy’s going to prime out with driver’s seat. And so they got to ask themselves, they bet on DISH or do they stay on the sidelines and hope like they only fail. I got to a funny feeling that the savvy management teams are going to bet on DISH.

Jonathan Chaplin

Charlie, a more forward question, in a year or two, when that DirecTV deal ultimately happens, are you a seller in that transaction or a buyer or are you into both?

Charlie Ergen

Well, 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 that DISH management team in some form or fashion. Now, don’t let that go to your head Erik because I’m going to kick your ass tomorrow, let’s wrap this call and something else, but.

Jonathan Chaplin

I always appreciated that Charlie.

Charlie Ergen

No problem.

Operator

The next question comes from Phil Cusick from JP Morgan. Please go ahead.

Phil Cusick

Hey, Charlie thanks. You’ve talked in the past about how it makes sense for your local compute needs, rather than having a real base station to be hosted on another company’s edge compute notes. Does that still make sense for your initial deployment? Or is it still a more of a long-term goal? And farther as well I have you – the spark you just raised how does that fit into the DISH strategy overall. And any update on the FCC, you’ve got a designated entity issue outstanding. And we’ll probably come to the end of this FCC administration anyway. And how should we think about that? Thanks very much.

Charlie Ergen

The edge – we don’t have Mark on the call because he’s in some high-level meetings. But obviously, he’s the architect of what we’re doing. So he would be the [indiscernible]. In general on the edge, it’s a place where networks are going to go. There’s economics that will drive the timing of that, but there’s no question that networks are getting closer – will get closer and closer to the edge and it would just be a timing issue when economics roll on that. 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 have to change anything to do that. The SPAC is – it is one more – it’s a couple of things that is different than DISH. It’s shorter term in nature. So taking a much shorter-term focus than –we’re there to say we’re 13 years into a 15-year project and wireless is back.

We’re certainly looking at things materially shorter than that, certainly less than five years’ timeframes in terms of businesses. We have a front row seat to where the world’s going in connectivity. We think there’s a lot of companies that can benefit from that. So this SPAC brings not the capital, it brings I think the strategic awareness, it gives that kickers back maybe an advantage over some others that just bring capital. It is likely that the SPAC would look at companies that are peripheral to what DISH and EchoStar do. It is possible that there’s some benefit to EchoStar, DISH from the SPAC. But that – but the focus really is the profitability and the gain – 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, we’re getting pretty damn 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, like the DE thinks we’re on for a long time. It looks like they will have a change of administration. So that always slows things down. But it would be helpful – DEs 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 and the courts have said that they get a chance to – they change the agreement, and I think they’re anxious to move forward. And they’re excited about what’s happened in the 5G. And, obviously, in any business, you’d like to have certainty. Whatever that certainly is, you’d like to have certainty just better than uncertainty and hopeful whether it could be this administration at the tail end or the next administration. Hopefully they get to come to decisions there. Operator we have time for one more from the analyst community.

Operator

The next question comes from Kutgun Maral from RBC Capital Markets. We’re taking this final question from the analyst community. [Operator Instructions] Kutgun Maral, please go ahead.

Kutgun Maral

Great, thanks for taking the question Two if I could. First on the Pay-TV side, DISH churn was slower EBIT again in the quarter, I realize the pandemic as a primary driver, but trying to look beyond that, are you seeing any discernible benefits from linear competitive pressure, even whether it’s from the cable companies continue to de-emphasized really a little bit? Or perhaps even at DirecTV? Or is that mostly being offset by a heightened competition for modern streaming services now in the market, and does that mean that the churn gives you conviction in the ultra-opportunity ahead? And then I have a good follow up.

Erik Carlson

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 Pay-TV landscape, especially related to DISH TV. So I think 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 tapped down just a bit because of the pandemic and obviously, we’re managing that on the acquisition side and making sure that potentially, we’re not as aggressive and we’re keeping our powder dry there. And you’re that we’re definitely seeing some of the benefits on the retention side. There’s still a lot of competition in rural America, which is really been where our focus has been. We positioned DISH several years back now. You really kind of refocus our efforts on high quality customers that were profitable, that we’re 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 called 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

Thank you and I’ll just hand the call to my colleague Jonathan Atkin for a follow up.

Jonathan Atkin

Yeah, on the wireless network side, I just – I might have missed it, but you gave 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 evaluating the Sprint sites, is that – have they presented you with a complete list, or is that an ongoing effort where there’s more lists that will determine they need to discard and potentially offer up to you? Thank you.

Stephen Bye

Yeah, so start with the coverage requirement. It’s 20% of the Pops by June 2022. And that’s our SEC 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 that. The 70% objective is June 2023. And again, we’re well on track to achieve that objective. And that is a minimum of 15,000 sites. That’s the guidance we’ve provided. And we’re obviously looking to exceed that objective. So we have a very healthy funnel and pipeline of sites that we can deploy to be able to achieve those objectives.

As it relates to the T-Mobile sites that we’re getting visibility off, that is a rolling forecast where T-Mobile is providing that on a rolling basis. As they look at decommissioning those sites. They’re giving us visibility of those sites. And we take that into consideration as we evaluate market-by-market, site-by-site, we look at search rings that is not a prerequisite for our design, we actually do our design. We do our plan independent of that. But then we take it into consideration as we look at candidates for those sites to see if they’re a better option than what we otherwise have. So that’s the approach that we take.

Jonathan Atkin

And then lastly, as you begin the retirement process that Charlie was talking about permitting and environmental, municipal, et cetera. Do you need to have a lease in place with the trail accompany a rooftop host at the site? Or can you do that independently, having not finalized the lease agreements at that particular site?

Stephen Bye

So what we do is we actually take into account all the candidate sites in our market for all the top 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 is weighted based on whether that’s an easy site or a hard site.

Charlie Ergen

Yeah, this is Charlie. From a practical point of view, we would expect we are entering the master lease agreements with tower providers. And then that we know what the – 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. Okay operator, let’s move to the press please.

Operator

Certainly, we will now take questions from members of the media. [Operator Instructions] Our first media question comes from Scott Moritz from Bloomberg.

Scott Moritz

Great, thank you. Charlie wanted to get your reaction – T-Mobile your brand enemy competitor launched a TV service this week that looks a lot like Sling TV, especially in the prices and the collection. Just wondering what you thought of that and how much of a greater competitive threat you might be betting.

Charlie Ergen

Well, I mean, obviously T-Mobile is a competitor of ours, obviously and their video services is aggressive and competitive. And maybe obviously that is one more competitor in an already crowded marketplace, which is – and obviously they’re going deep into rural America, 99% of rural America or 99% of the country for the FCC. So we’ll have to be on top of our game to compete there. Obviously knocking the ball out of the park in terms of execution and they’re changing management is off to a great start. So look, I’m just – I’m beside myself that I get to be in the same – that we as a company we get to compete against companies that good and because that that makes us better too. So, Erik, you’re the one that’s got to compete against that particular one.

Erik Carlson

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

Scott Moritz

Thanks.

Operator

The next question comes from Amy Maclean from Cablefax.

Amy Maclean

Hi, yes. Thanks. I’m afraid I have to ask you the retransmission consent question, but I think the Cox media disputes have been going – the blackout is going on for about four months or so now. And no, there’s some other – the former Northwest Stations too, that have been worn for a while. Are there any talks going on at all there? Or is this something where you’re looking really for the court to sort out?

Charlie Ergen

Erik has a different answer there, but I would say in general, when somebody’s been down for three or four months, it’s not likely they’re coming back. Because what happens is, you lose the customer, if there’s really somebody who wanted to watch that particular network and they’re gone, right. They’ve gone out and found enough – they put an offer antenna in place, they found another alternative, find it they’re online, find out if they’ve gone to Lulu or they’ve gone somewhere else, I’ve gone to a competitor. We weren’t willing to pay the price that they offered four months ago, we’re certainly not going to pay a 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 it with regional sports, I mean, I always tell the program is down listed, but always – if you come down, it’s – you got to get a crowbar to get back up in four months. It’s unusual that you would go back up, unless there’s some other prevailing reason why. But while those customers we put – they’re getting – they really want the network, we’ve found a way for them to get it. And they sure as heck don’t want to pay for it twice. But that’s my conversation with programming. But Erik, do you have a different take on it maybe.

Erik Carlson

Charlie, maybe I’ll be able to supply the difference between and Amy thanks for the question. I mean, look Charlie’s rider than obviously that’s, that’s generally our viewpoint. We 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 programmer comes down, customers leave and they find alternatives. So when that happens, usually the contract is worth less to us than it was before they went down. But look at we’re always going to listen, we’ll do what’s right, by the company, by our customers and our shareholders.

Charlie Ergen

Yeah and we have real metrics. We know the customer has retrains as a result of take down. We prefer not to have to take down, we pay retrans, right. We know what the market prices were retrans. So if somebody’s materially higher that doesn’t make sense to us. I mean, we’re economic animals, we have real data, there’s real science behind it.

Stephen Bye

I mean, Amy you’re just seeing that there’s just a lot more – especially if you’re a connected customer, there’s a lot more places to get the content. And Charlie’s alluded to it before whether programmers with the direct to consumer offering that have very similar programming have the same programming, or slightly delayed, so those things going to go to our equation.

Charlie Ergen

And I’m empathetic to the local broadcaster, because they’re getting squeezed from the networks themselves with reverse retrans 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 partnership really works where you look at and say how do we both get better, but that’s not usually the way broadcasting contracts go or programming contracts go which is a shame, but I’m very empathetic to the situation really and I understand why they would – why they’re asking what they’re asking is just not economic reality.

Amy Maclean

Is low cost, something you all are looking at or promoting in anyway?

Charlie Ergen

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 a – that that’s a choice that they make. And the app –just as we have Netflix and Prime, we that application is on our set top box, and customers can click on it, and watch it for free. So you can understand the economics the business changed, and that’s just one case. But we are active with offer intense that would be – that we control that we can go in, 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 broadcaster’s are required to provide it for free to somebody who puts up an antenna. So there’s a limit on what they can charge is all I’d say. And sometimes there’s an honest disagreement of what that price should be in with a couple of gaps, but when people were in that honest disagreement stage. One more, [indiscernible]. Operator, are there any other questions?

Operator

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

Tim Messner

That’s it. Everybody, have a great afternoon. We’ll see you next quarter.

Operator

This concludes today’s call. Thank you for your participation. You may now disconnect.

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