DISH Network Corp: A Contrarian 5G Stock You Likely Haven’t Considered

Why DISH Stock Could Be an Opportunity

DISH Network Corp (NASDAQ:DISH) probably hasn’t been on the radar of most growth investors.

The company is known for being a pay-TV provider. With the rise of the on-demand video streaming industry, the prospects of TV networks is not exactly that bright.

But if you think DISH Network stock is only about pay-TV, you could be missing out on a serious opportunity.

I’m talking about 5G.

Now, you are probably wondering how a TV provider has anything to do with the fifth generation of cellular network technology.

Well, the story began in the summer of 2019, when T-Mobile US Inc (NASDAQ:TMUS) and Sprint Corp were trying to get their merger approved by regulatory authorities. One of the conditions for the deal to go through was that Sprint had to sell its prepaid wireless business Boost Mobile to DISH Network Corp.

In July 2020, DISH announced that it had completed the acquisition of Boost Mobile. (Source: “DISH Enters Retail Wireless Market with Close of Boost Mobile, Advances Build of the Nation’s Girst Standalone 5G Network,” DISH Network Corp, July 1, 2020.)

With this acquisition, the pay-TV company entered the retail wireless market.

Of course, compared to the three major players in the U.S. wireless market—Verizon Communications Inc. (NYSE:VZ), AT&T Inc. (NYSE:T), and the post-merger T-Mobile—DISH may seem too small to get noticed.

But here’s the thing: by purchasing Boost Mobile, DISH has acquired more than nine million retail wireless subscribers. That’s a sizable business to start with, considering that DISH had no prior presence in the wireless market.

Part of the deal was that DISH Network Corp can access the new T-Mobile network for seven years. But that’s not all: DISH is also building its own standalone 5G network in America. Therefore, the company will have the ability to serve its customers between T-Mobile’s nationwide network and its own 5G network.

“The FCC and DOJ have shown continued leadership in advancing the nation’s 5G wireless future, and thanks to their efforts, DISH is able to focus our resources on building the only 5G network in the U.S. based on Open [Radio Access Network] architecture, completely from the ground up,” said DISH’s president and chief executive officer, Erik Carlson. (Source: Ibid.)

In early December, DISH announced that it had successfully integrated and validated end-to-end 5G connections using the industry’s first Open Radio Access Network (O-RAN)-compliant Frequency Division Duplex (FDD) radio. (Source: “DISH Completes Successful 5G Field Validation and Deploys Open RAN Radio Units from MTI,” DISH Network Corp, December 8, 2020.)

In other words, DISH will be a player in the 5G game.

The company has also posted strong financial results lately. In the third quarter of 2020, DISH Network generated $4.5 billion in total revenue, which marked a 42.9% increase year-over-year. (Source: “DISH Network reports third quarter 2020 financial results,” DISH Network Corp, November 6, 2020.)

Earnings came in at $0.86 per share for the quarter, up 30.3% from the $0.66 per share earned in the year-ago period.

Notably, the company’s added 116,000 net pay-TV subscribers in the third quarter, bringing the total number to 11.4 million at quarter-end.

DISH Network Corp (NASDAQ:DISH) Stock Chart

Chart courtesy of StockCharts.com

Analyst Take

Because investors aren’t really enthusiastic about the TV network business, DISH Network stock hasn’t been a hot commodity. Year-to-date, it’s down about 15%.

However, due to DISH Network Corp’s potential in the 5G era, DISH stock could represent a contrarian opportunity for 5G stock investors.