Dish Continues to Lose Subscribers, Though Profit Doubles

Dish Network Corp. said Monday it lost 134,000 pay-TV subscribers in the first quarter of the year as the rate of cancellations increased, though the company's profit doubled from a year earlier.

Dish has struggled to boost its subscriber numbers amid what executives have said is a negative pay-TV industry, pressured by a weak economy and heavy promotions from competitors.

In part to offset losses, Dish rolled out a new online video-streaming service called Sling TV in the U.S. earlier this year. The service features a slimmed down subset of channels, culminating a three-year effort to create an inexpensive streaming TV service to reach a younger generation of viewers.

At the end of the first quarter, Dish's pay-TV service had 13.8 million subscribers, down from 14.1 million a year earlier. Gross pay-TV additions were 554,000, compared with 639,000 a year earlier.

Pay-TV subscriber churn rate, or the rate at which people terminated service, was 1.65%, compared with 1.42% a year earlier.

The company's satellite broadband customer growth slowed to 14,000 net subscriber additions in the quarter, down from 53,000 additions in the previous year's quarter.

Overall, for the quarter ended March 31, Dish posted a profit of $351 million, compared with a year-earlier profit of $176 million.

Revenue grew to $3.7 billion from $3.6 billion a year earlier.

Analysts polled by Thomson Reuters had projected revenue of $3.74 billion.

The results come as Dish faces increasing pressure for its tactics in a recent record-setting auction of wireless airwaves.

At issue is Dish's coordination with a pair of small entities that together won $13.3 billion worth of bids--second only to AT&T's $18.2 billion--while qualifying for $3.3 billion in discounts aimed at small businesses.

Dish has said it complied with the law and followed industry precedent in the auction, which drew $45 billion in bids. But rivals Verizon Communications Inc. and AT&T Inc. have complained that Dish's tactics distorted the auction's outcome. Dish didn't win any licenses itself.

Write to Chelsey Dulaney at [e-mail]

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