DISH Network Corporation Q2 2010 Earnings Call Transcript

DISH Network Corporation Q2 2010 Earnings Call Transcript
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DISH Network Corporation (DISH)

Q2 2010 Earnings Call Transcript

August 9, 2010 12:00 pm ET

Executives

Jason Kiser – Treasurer

Stan Dodge – EVP, General Counsel and Secretary

Tom Cullen – EVP, Sales, Marketing and Programming

Bernie Han – EVP and COO

Robert Olson – EVP and CFO

Analysts

John Hodulik – UBS

Tuna Amobi – Standard & Poor's

Spencer Wang – Credit Suisse

James Ratcliffe – Barclays Capital

Marci Ryvicker – Wells Fargo

Tom Eagan – Collins Stewart

Jason Bazinet – Citigroup

Matthew Harrigan – Wunderlich Securities

Todd Rethemeier – Hudson Square Research

Rich Tullo – Albert, Freed & Company

Gerard Hallaren – TownHall Investment

Doug Mitchelson – Deutsche Bank

Bishop Cheen – Wells Fargo Securities

Benjamin Swinburne – Morgan Stanley

Dmitry Khaykin – ClearBridge Advisors

Presentation

Operator

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Previous Statements by DISH
» Dish Network Q1 2010 Earnings Call Transcript
» Dish Network Corp. Q4 2009 Earnings Call Transcript
» Dish Network Corp. Q1 2009 Earnings Call Transcript

Good morning. My name is Steve, and I will be your conference operator today. At this time I would like to welcome everyone to the Dish Network Corporation second quarter 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and answer-session. (Operator Instructions)

Thank you. Mr. Jason Kiser, you may begin your conference.

Jason Kiser

Thanks, Steve. Thanks for joining us. My name is Jason Kiser. I’m Treasurer here at DISH. I’m joined today by Tom Cullen, Executive Vice President, Bernie Han, our COO, Robert Olson, our CFO, Paul Orban, our Controller and Stan Dodge, our General Counsel. Before we open up for Q&A, we do need to do our Safe Harbor disclosure. So for that we will turn it over to Stan.

Stan Dodge

Thanks, Jason. Good morning, everyone. And thank you for joining us as you know we invite media to participate in listen-only mode on the call and ask that you not identify participants or their firms in your reports. We also do not allow audio taping and ask that you respect that. All statements that we make during this call that are not statements of historical fact, constitute forward-looking statements, which involve known and unknown risks and uncertainties and other factors that could cause our actual results to be materially different from historical results and from any future results expressed or implied by such forward-looking statements. For a list of those factors, I refer you to the front of our 10-Q. All cautionary statements that we make during this call, should be understood as being applicable to any forward-looking statements that we make where ever they appear. You should carefully consider the risks described in our reports and should not place undue reliance on any forward-looking statements. We assume no responsibility for updating any forward-looking statements.

And with that out of the way, I’ll turn it back over to Jason.

Jason Kiser

Thanks, Stan. And we're going to go directly into Q&A so you can open p the line.

Question-and-Answer Session

Operator

(Operator Instructions) Your first line is from John Hodulik from UBS. Your line is open.

John Hodulik

UBS

Yeah. Thanks. I guess, first just to confirm Charlie is not on the call this afternoon?

Tom Cullen

Yeah. John this is Tom. You're stuck with us. Charlie and his family are traveling on holiday, so don't expect any Charliisms to quote this quarter.

John Hodulik – UBS

Okay. Sounds good. I guess, just questions regarding some color around churn. What's driving it, if you guys could be more specific than you were in the release in terms of voluntary versus in-volunteer and do you expect the churn level to remain elevated going forward here?

Tom Cullen

Well, this is Tom, again. First of all, as you know we don't provide guidance so will talk – will restrict our remarks just to the second quarter. I’d say first of all, John, contrary to a lot of reports out there; we have not seen any significant improvement in the economy in general. We think unemployment and consumer confidence did have an impact on our quarterly results and as a valued provider in the industry we probably may feel that more than others, but being a national provider, we have visibility into every ZIP code in the U.S. and where there are economic hardships, we can certainly correlate some negative activity with our business in those same areas. That would be one.

Two, no excuses. We still have a long ways to go in terms of our service provisioning, service quality, although during the quarter we were awarded the ACSI number one spot for all cable and satellite providers we're not satisfied with where we're at in terms of providing customer service and we continue to make improvements there. The third area I would touch on and I don't want to over play this or over state it, a year or so ago, about May of 2009 we introduced a pay in advance type of product and as you know with any pay in advance like offering, there has to be a strong focus on lower sack and lower OpEx in order to compensate for what should be expected higher levels of churn for those segments.

And while we don't break that out separately at this point, there are – there is a bit of a contribution from the new pay in advance products to an inflated churn level. I should say on that on pay in advance, it’s a product that we continue to tweak, so we’ve increased credit thresholds. We changed the upfront pricing a bit. It’s a work in progress so I would say.

Operator

Your next question comes from the line of Tuna Amobi of Standard & Poor's. Your line is open.

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