DISH Network (DISH 3.08%) stock has been sliding for almost a full year. That's largely because the company has steadily lost satellite subscribers and does not sell internet, which would allow it to maintain a lucrative relationship with cord-cutters.
In many ways, DISH has helped create its own downward trajectory. The company's Sling TV streaming skinny bundle was the first of its kind, and at 2.2 million subscribers, it's nearly twice the size of its closest rival. The problem is that the company lost more higher-paying satellite subscribers (995,000) than it gained Sling customers (711,000) in 2017, according to data from Leichtman Research Group.
Unlike its cable rivals and the AT&T-owned DirecTV satellite television provider, DISH does not sell broadband service. That means Sling customers have to get internet from another provider, and the company cannot earn back its lost pay-television revenue by selling broadband.
While Sling is a pioneering service, it now has many rivals. In addition, the cable companies that have relationships with customers through selling them broadband could leverage that relationship and offer skinny bundles or promotional pricing to lure cord-cutters back.
That puts DISH in a precarious position. One of the selling points of Sling is how easy it is to sign up or cancel. Essentially the company's entire streaming customer base is at risk to a rival offering a better deal.
The short-term customer loss and longer-term dim prospects for the company likely factor into why its stock has been steadily sinking. After closing March at $37.89, it dropped to $33.50 at the end of April, an 11.5% drop according to data provided by S&P Global Market Intelligence.
It's also worth pointing out that while DISH shares closed at $36.81 on April 26, they dropped to $34.70 on April 27 -- the day when rumors that Sprint (S) and T-Mobile had agreed to merge began to be reported. After that deal became official on Sunday, April 29, shares fell even further.
DISH has been trending in the wrong direction, and partnering or merging with a company that offers a related service (ideally broadband internet) would make its path forward easier. Sprint would have been a potential partner had the T-Mobile deal not happened (and it could be if regulators nix that deal).
That would not have been an ideal partner, but the two companies are subscription based, and joining forces might have led to them building a 5G network that could deliver Sling TV. With a merger partner, DISH is likely to lose more satellite customers and be unable to replace that revenue with streaming customers even if it can keep its user base around the same number of subscribers.