(Reuters) - Satellite TV provider Dish Network Corp reported a 38 percent rise in fourth-quarter profit on Friday and the company’s chairman said he saw “nothing good” for competitors if U.S. regulators approve the merger of Comcast Corp and Time Warner Cable.
Dish shares rose 1.6 percent to $57.97 after it reported earnings-per-share of 63 cents, beating the 41-cent consensus forecast of analysts surveyed by Thomson Reuters I/B/E/S.
Dish Chairman Charlie Ergen said the combination of Comcast and Time Warner Cable would concentrate broadband, video and content in a “nationwide player.”
“That’s going to send a seismic shift across our industry in ways that maybe we can’t predict today,” he said on a conference call after the satellite TV provider released its results.
Comcast, the nation’s largest cable company, said on February 13 that it had agreed to acquire No. 4 Time Warner Cable in an all-stock deal for $45.2 billion. The proposal faces reviews from U.S. regulators who will study its effect on competition.
Comcast has argued that the combination would not reduce competition because the two cable providers do not compete in any markets. The company pledged to divest 3 million subscribers, so the combined customer base of 30 million would represent just under 30 percent of the U.S. pay television video market.
Ergen said the deal, if approved, “certainly doesn’t hurt the case for consolidation” of satellite TV providers. The U.S. government blocked a deal between Dish and DirecTV in 2002.
“If you take the No. 1 and 4 providers and put them together, it would be hard to see why you couldn’t put the No. 2 and 3 providers together,” he said. DirectTV is the nation’s second largest pay TV provider after Comcast, and Dish is third.
Ergen said the merger would create advantages for the cable operator in negotiations with media companies that supply programming. “When they can combine and go buy content, they can go buy content cheaper than anybody else,” he said.
“I see nothing good in that transaction for content owners, broadband providers, or video distribution companies” other than Comcast and NBC, he said.
Dish is still reviewing the deal’s impact and will present options to its board, Ergen said. He said it was too early to say if Dish would oppose the merger.
A Comcast spokesman had no comment on Ergen’s remarks.
Investors have been waiting to learn more about Dish’s strategy for the wireless spectrum the company has spent billions amassing.
Asked on Friday if he would consider going after wireless carrier T-Mobile USA to potentially compete against Japanese mobile operator Softbank, which owns rival Sprint Corp, Ergen said it was unlikely. Dish tried to derail Softbank’s plans to buy Sprint last year by bidding for the carrier but ultimately lost.
“Certainly we’ve had experience competing against Softbank and (are) realistic to know that we’re not going to outbid Softbank in any transaction,” Ergen said.
Ergen said he was “cautiously optimistic” Dish will reach a deal with Walt Disney Co before the company’s next quarterly conference call. The companies have extended a now-expired contract and are negotiating the terms for Dish to carry ESPN and other Disney-onwed networks.
For the quarter that ended in December, Dish said its stable of U.S. customers reached about 14.1 million as it added 8,000 pay-TV subscribers. The average revenue generated per subscriber rose 5 percent to $81.24.
Dish’s net income for the quarter reached $288 million compared with $209 million a year earlier. Revenue rose about 7 percent to $3.54 billion.
Reporting by Soham Chatterjee and Aurindom Mukherjee in Bangalore; Editing by Maju Samuel, Saumyadeb Chakrabarty, Ronald Grover and Jonathan Oatis