Dish sells Caribbean Boost subs and spectrum to raise $256M in cash

Dish Network struck a deal to sell its spectrum assets in Puerto Rico and the U.S. Virgin Islands, along with about 120,000 prepaid Boost Mobile subscribers in those markets, to Liberty Latin America.

Liberty will pay $256 million in cash and also provide international roaming credits to Dish. The purchase price will be paid in four annual installments commencing on the closing date, which is expected sometime next year.

On yesterday’s Q3 2023 earnings call, Dish Chairman Charlie Ergen said, “We have a lot of experience in Puerto Rico over the years with Pay-TV and in the last couple of years with wireless. It's a challenging market. It's a very competitive market. It has weather challenges as well. The build-out would be expensive. So, we thought it best to enter into a transaction which gives Liberty a much more competitive spectrum position, brings us new capital in terms of the sale proceeds, as well as pretty significant capital savings from not having to build on both the islands, which are very expensive builds. So, by entering into the transaction we’ll now be able to focus those funds back into the continental U.S.

The analysts at Moffett Nathanson penned a research note yesterday entitled, “Dish Network Q2 2023 Earnings: The Wheels Falling Off.”

They wrote, “Today’s announcement of a sale of their Puerto Rican and USVI Boost subscribers to Liberty will raise a small amount of money ($256M pre-tax over four years), and it’s admittedly not something we (or likely anyone else) had thought to value separately. But it’s small beer relative to what buying the 800 MHz spectrum from T-Mobile would cost. And, more relevantly, to what standing up a real network and business would cost.”

Dish would really like to buy T-Mobile’s 800 MHz spectrum, but it’s too financially strapped right now to do so. It recently struck a deal with T-Mobile to pay $100 million toward the $3.59 billion purchase price in exchange for an extension until April 1, 2024 to close the deal.

Of today’s news related to the sale to Liberty Global, Tom Cullen, EVP of Corporate Development at Dish Network, said, “This transaction will enhance competition within the wireless market in Puerto Rico and the U.S. Virgin Islands, while providing Dish with additional capital to focus on our wireless business in the United States.”

Vivek Khemka, senior vice president, Liberty Latin America, stated, “Upon completion of the spectrum acquisition, we will have valuable low, mid, and high band spectrum that will allow us to add more capacity, increase speeds and further strengthen our leading 5G mobile network.”