Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Echostar Comm. -- Ignore unavailable to you. Want to Upgrade?

To: Noel who wrote (1043)	4/1/1999 3:26:00 PM
From: Frank Walker	Read Replies (1) \| Respond to of 1394

DISH has a huge asset in their customer base of 2.1M users. Customers pay an average of $50/month, or $600/year, for a total annual revenue to DISH of $1.2B (B=Billion$). That customer base is not going to go away, because they get hooked on the quality viewing and invest about $200 in a DISH-specific antenna and set-top-box (correct me on this, I don't have the details). Actually the customer base is now increasing at a 50% clip, about 100,000 new users monthly. Because of the stability of the user base (it won't shrink and will likely keep on growing fast) we can think of it as a bond that pays interest of $1.2B per year. How much would an investor need to pay for that bond? They would pay lots more than $12B, depending on prevailing interest rates. Looking at it another way, we are saying each customer is worth about $6,000, or more. Because of the 50% growth rate of the customer base, DISH could have over $18B worth of these "bonds" in a year. The market cap of DISH is now 45M * $80 = $3.6B, a relatively small number compared to those customer "bonds". The satellites and ground base cost a lot to build and operate, of course, but this shows that DISH has huge and very fast growing "customer assets" that can be relatively easy to evaluate. I wonder what Mario Gabelli thinks of DISH. He is the guru in cable and media stocks. - ILG PS - another nice thing is that except for subsidies and marketing costs there is no incremental equipment or operating cost to DISH for new subscribers. I am a bit worried about competition from digital cable in the near future, they might do well because of easier customer installations (no dish to aim). But the cable wiring will take a few years to be upgraded by all the CATV operators, and the satellites have national coverage footprints right now.