Dish Network's Broadband Network Plans Delayed

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- Last year Dish Network ( DISH) acquired spectrum assets of DBSD North America and TerreStar Networks for $2.8 billion.

The idea was to acquire these assets at cheap prices and use them to build a wireless broadband network that Dish Network can bundle with its existing pay-TV services. This can give Dish an edge against its rival DirecTV ( DTV) and help it access rural areas where cable companies such as Time Warner Cable ( TWC) do not have adequate infrastructure.

However a recent decision by the Federal Communications Commission (FCC) suggests that Dish may not be able to put its plan in action this year. The FCC denied Dish's waiver request for new wireless network and has stated that it will resort to formal deliberation on the request. This move gives Dish's peers more time to build out their offerings.

See our complete analysis for Dish Network here.

Dish Network has been betting on its launch of Blockbuster streaming service to improve subscriber trends and that has worked so far as evident from the company's fourth-quarter results. In the fourth quarter, Dish was able to reverse the trend and gain 22,000 net pay-TV subscribers.

However, the move to offer broadband is a long-term strategic move that will strengthen Dish Network's competitive position over a period of two to three years. If Dish can continue to leverage Blockbuster's service and gain subscribers, the FCC delay may not prove to be much of a set back.

Nevertheless the downside is that the other pay-TV providers have now sped up the process of significantly enhancing their services. Those providers include Comcast ( CMCSA) launching Xfinity Streampix, DirecTV planning to launch its streaming service in the second quarter, Time Warner Cable launching streaming apps for several devices and Verizon ( VZ) partnering with Redbox.

Our price estimate for Dish Network stands at $30.88 , implying a slight premium to the market price.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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