Dish Network Corp. finally settles lawsuit related to telemarketing violations

A U.S. federal court recently ordered Dish Network Corp. (DISH) to pay a fine of $210 million to the government and four states to settle a long-running court case.

The lawsuit, which started back in 2009, claimed that the Englewood, Colorado-based company, and its contractors made millions of illicit prerecorded phone calls to market its satellite television and programming services. The calls even targeted Do Not Call Registry numbers, which is a database maintained by the U.S. government. It is a list of phone numbers of individuals and households who have submitted a request to avoid calls from telemarketers.

Dish has agreed to pay a $126 million fine to the U.S. government, according to a filing with the federal court in Illinois. It will pay the remaining $84 million to four states including Illinois, Ohio, California, and North Carolina.

Speaking on the latest court order, the company said in a statement “While we respectfully disagree with the underlying liability judgment, which involves telemarketing calls made between 2003 and 2011, this matter is now resolved.”

U.S. District Judge Sue Myerscough in 2017 found Dish guilty of breaching several telemarketing regulations. The latest lawsuit was filed after the company resolved the claims made by the other 46 states of America.

Apart from this lawsuit, the company has performed reasonably well this year in terms of overall growth. It beat the consensus estimates for both earnings and revenue for the third quarter.

Financial highlights

Dish reported earnings of $505 million, or 86 cents per share for the third quarter, up from $353 million, or 66 cents per share in the same period of 2019. Analysts surveyed by FactSet were expecting the company to report earnings of 63 cents per share.

Revenue rose to $4.53 billion in the quarter, as compared to $3.17 billion in the year-ago quarter, and up from analysts’ average estimate of $3.13 billion.

The company said that net pay-TV subscribers in the quarter increased by 116,000 in the quarter, as compared to a surge of 148,000 in the comparable period last year. With the latest additions, its total pay-TV subscribers stood at 11.42 million at the end of Q3.

On the other hand, retail wireless net subscribers in the quarter fell by 212,000 to reach 9.42 million.

5G network upgrades

Dish has signed agreements with several companies to support the deployment of its 5G network across the U.S. Last month, it inked a deal with Qualcomm Inc. to build its next-generation network with the help of open and cloud-based platforms in the next three years.

The company is building its network with the help of a new technology known as RAN, which is an open radio access network. The biggest advantage RAN has over existing technologies is that it uses software to support network functions on the cloud, thus reducing the need for physical devices. Qualcomm will offer its 5G RAN platform to Dish and its network vendors, according to the terms of the agreement.

Dish is also working with Fujitsu, Nvidia, and Mavenir among others to supply different equipment required for a network upgrade. China-based Huawei was one of the leading suppliers of equipment for telecom companies, but a ban on the Chinese company has reduced the options for potential customers looking to upgrade to the next generation network. 5G equipment makers such as Ericsson and Nokia have come forward to fill the gap after Huawei was banned not just in the U.S. but many other European countries.

Separately, Dish last week announced fiber deals with four different companies including Zayo, Everstream, Uniti, and Segra. The latest agreements will help the company’s 5G network to cover 60 million U.S. citizens across different sites.

Dish plans to roll out its service in selected areas during the first quarter next year, ahead of its major 5G deployment by the end of 2021.

Stock performance

Dish share price has been on a roller coaster ride since the start of 2020. The stock touched a high price of around $41 in February and a low price of about $18 in March. Its shares are trading higher since the company released its quarterly results last month. Overall, the stock has surged more than 9 percent on a year-to-date basis.