Dish meets the FCC deadline
Dish Wireless last week has announced that its 5G Standalone (SA) network, based on open-RAN, now provides 5G broadband service to over 70% of the U.S. population, meeting its FCC buildout requirements. Dish has also fulfilled other FCC commitments, including the deployment of over 15,000 5G sites by the June 23 deadline. Customers within the 70% coverage area can now access Dish's 5G broadband network through Project Genesis, Dish’s 5G-specific service limited to run on the Motorola Edge+ 2022 and 2023 phones. The network is also available to Dish’s legacy Boost Mobile prepaid and new Boost Infinite postpaid service customers, though device compatibility will be an issue for many users.
The Circana Take:
- Dish’s relentless efforts to meet the FCC’s 70% coverage deadline are certainly remarkable, but it required the organization to shift its financial and operational efforts from the existing businesses, especially the Boost Mobile prepaid service, which suffered dearly in the last year. Dish has consistently been losing prepaid customers quarter after quarter due to competitive pressures as well as operational issues such as system outages, and the new network will help little in winning back these customers.
- Dish’s Boost Mobile prepaid brand ranks at the bottom of Circana’s carrier Net Promoter Score (NPS) rankings. The Project Genesis program, which relies on the new 5G network, will have little impact in terms of growth (due to limited distribution and even more limited device portfolio). And the new Boost Infinite postpaid service pricing at $25/month (for BYOD users) is not aggressive enough for a leap of faith, especially when cable MVNOs offer more aggressive bundle deals to poach the big three’s postpaid base.
- Now that the new network is up and running, and the deadline worries are temporarily subdued, Dish should refocus on customer retention and growth through the end of the year. The carrier’s performance in these two areas will be key in determining whether it can truly be a postpaid contender in the mid- to long-term.
AT&T warns of lower net-adds in Q2
The AT&T Chief Financial Officer (CFO) Pascal Desroches last week revealed that the company anticipates a decrease of approximately 100K in its postpaid phone net additions for the second quarter compared Q1 2023. The decline is driven by AT&T’s “intentional” 75K postpaid phone drop out from a government contract due to low margins and pricing pressures from competitors that slightly increased the Q2 churn. The CFO also commented that the carrier is on track with its postpaid ARPU growth projections, which is partially driven the higher adoption of enhanced device insurance program.
The Circana Take:
- The rise in AT&T’s Q2 churn is not surprising as Circana Connected Intelligence has been reporting on this expected incidence due to our latest data cited a growing number of AT&T customers planning to jump ship. As the AT&T CFO highlighted, this behavior is driven by rivals’ aggressive prices, though many of these elusive AT&T customers have reported that the carrier’s lack of free content bundle offers is an important churn driver.