Jason Kiser - Treasurer Charlie Ergen - Chairman and CEO Tom Cullen - EVP, Corporate Development Roger Lynch - CEO, Sling TV and EVP, Advanced Technologies Bernie Han - EVP and COO Steve Swan - SVP and CFO Stan Dodge - EVP, General Counsel and Secretary

Marci Ryvicker - Wells Fargo Securities Phil Cusick - JPMorgan Craig Moffett - MoffettNathanson Ben Swinburne - Morgan Stanley David Phipps - Citigroup Frank Louthan - Raymond James Tom Eagan - Telsey Advisory Group Jonathan Chaplin - New Street Research Phil Goldstein - FierceWireless Malathi Nayak - Reuters Shalini Ramachandran - Wall Street Journal Mike Farrell - Multichannel News

Good afternoon. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the DISH Network Corporation’s First Quarter 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Jason Kiser, you may begin your conference.

Thanks, Eric. And thanks for joining us everybody. It’s Jason Kiser; I am Treasurer here at Dish Network. I am joined today by Charlie Ergen, our Chairman and CEO; Tom Cullen, Executive Vice President of Corporate Development; Roger Lynch, CEO of Sling TV; Bernie Han, who is our COO; Steve Swain, our CFO; and Stan Dodge, our General Counsel. We are going to go straight into Q&A but before we do that, Stan needs to cover the Safe Harbor disclosures so for that I will turn it over to Stan.

Thanks, Jason. Good morning, everyone and thank you for joining us. We ask that media representatives not identify participants or their firms in your reports. We also do not allow audio taping and ask you to respect that. All statements we make during this call that are not statements of historical fact constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from historical results and from any future results expressed or implied by such forward-looking statements. For a list of those factors, please refer to the front of our 10-Q. All cautionary statements that we make during this call should be understood as being applicable to any forward-looking statements we make, wherever they appear. You should carefully consider the risks described in our reports and should not place undue reliance on any forward-looking statements, which we assume no responsibility for updating. Operator we will now open up the call first for analyst Q&A and then media Q&A.

[Operator Instructions] Your first question comes from the line of Marci Ryvicker with Wells Fargo. Your line is open.

I have two questions, first, related to spectrum and then second to the core business. Charlie, not that I think that this will happen but should the FCC find you violating some rule with regards to the designated entities that were used in AWS-3 auction. I guess first of all how do you think about the $3 billion and does that concern you at all? And then secondly I would assume if you had to pay the 3 billion that the restrictions that the designated entities have with that spectrum go away so then you have free and clear use of AWS-3. And then the second question is more related to the core business, now with Joe Clayton gone and you are back in the CEO, are there any priorities that are different at this point. How do you think about deploying capital to the Pay-TV business? Thanks.

Okay this is Charlie Ergen and I'll probably take just first shot at both of those and then may be somebody will jump in on the core business, but on the auction all I can say is that I'm confident that DISH and the DEs followed the rules of the auction and I do not think there that the discount -- I think the discount will be allowed. And so I think you are correct that if you don't get a DE discount the encumbrance fall away, I mean obviously DEs get a discount for a couple of reasons, one is the encouragement by the Federal Government, Congress and the FCC who've passed these rules, were economic development and the second is that the DEs have restrictions on their spectrum, so it's less valuable so therefore it's a discount and obviously they can't lease more than 25% of the spectrum, an entity for five years, they can't sell the spectrum without a penalty, so that devalues the spectrum to DE. And it's probably one of the reasons that maybe some of the bigger players didn’t use DEs because of the restriction on leasing, because they would like to deploy that capital, I mean that spectrum into their networks immediately and where they've used DEs in the past in this option they did not. As far as the core business, I probably do look at things a little different than Joe. I'm certainly going through a review, I look at it economically and long-term so I look at the value of a customer and when you make an investment in a customer you can get return on that capital, not all customers are created equal. Certainly I see room for improvement in terms of how we allocate capital to customers and we've really gone along two different fronts. One is, I think there's room for improvement on our -- in terms of getting a better credit customer and a customer that we believe will stay with us longer term and do not escape, some of our parts are pretty sophisticated so I think it's a bit of rightsizing for us in terms of making sure that we're getting this more sophisticated customers, the sophisticated equipment and maybe a little simpler equipment too, to some of our customers and I think that the, and there'll be some questions on this later. So I'll just try to be brief but I think Sling TV adds a total different dimension because there the economics are much different, the cost of churn is very low the cost of the acquisition is very low. Those customers have different set of economics than a linear, core customer that we have today, and we want to take advantage of some of those things. So this is not as dramatic, perhaps what Netflix went through, but Netflix when they looked at, and so I'm not trying to insinuate that this is anything, like this dramatic, but it's somewhat similar in the sense that when Netflix went from a DVD business in the mail to being able to deliver something to people you know instantly through the Internet you know they started focusing on that side of the business because they knew long-term that that was going to capture more of the public. Now I'm not saying that's going to happen here but I do think that things like Sling TV are going to become more and more prevalent in the business and the way you deploy capital will be different as a result of that. So I think I probably do have, I think that fundamentally is going kind of top down and looking at those things.

Your next question comes from the line of Phil Cusick with JPMorgan, your line is open.

Charlie can you talk about just the difference between the collusion that some have talked about you being charged with and the coordinated bidding that you did with your Des? Thanks.

Yes, I'm not an attorney so let me just, I think we got, I think we've been accused of -- I can only say that DISH and to my knowledge the DEs followed the rules, they did not violate any FCC rule for the auction, did not violate any antitrust law and that the procedures of, the FCC has a procedure to go through and verify that, and then they should do that and that's a procedure that's been out there for 20 years as long as the DE program has been out there. So there will be people will be able to replay to the DE’s application by tonight, or by today and then by early next week I think on Monday or Tuesday the DEs, and probably DISH will have replay comments to that and then by the 26th of May will be replays to our replay until next week we will replay to any formal thing that people file in opposition which I am sure there will some opposition then we’ll follow comments to that. But I can assure that DISH and the Des followed the rules and did what the rules -- and only participated in this auction the way that rules allowed.

May be if I can try a different one. Can you -- I understand it’s a little early on Sling to be giving your subscriber counts, but can you give us an idea of sort of order of the magnitude of paying customers today maybe 10s or 100s of 1000s is that measured in?

I think and Roger may want to jump in I think look the results are encouraging, it’s a brand new thing I mean the people -- it eliminates some pain points for customers it is on track and it is instant gratification and it works on existing devices for a lot of people. So we’re really encouraged with it. We think that it has -- we don’t think it’s a flash in the pan. We don’t think it’s a -- we think it’s long-term that IPTV is here to stay. Obviously Sony is rolling out a different strategy, CBS is rolling out of strategy, HBO is rolling out a strategy so we’re going to see more and more of it and we’re hopeful that DISH and Sling TV will be a leader there. We have our work cut out force I mean it’s a much more complicated due to live TV than just a stream TV. We are in multiple devices in different makes and models with different processors so within the same device there is different processors and generations, we have got multiple programmers that have different rules. So we have some inconsistencies in the rules with our customers, which is a little bit frustrating for our customers and we are not as good as we need to be technically. So on the other hand, again you can go and read the reviews of the product for yourself but for the vast majority of people they love it and they’re really excited and they are for the vast majority our new entrants into the business and people who weren’t paying for television before and so we’re excited about where it’s going to go and I think it’s going to be meaningful revenue for DISH. We had to scale it. And I think it would be not only meaningful revenue but I think it would be meaningful value to the Company. I don’t know Roger, do you want maybe add something there?

Yes, just when we launched it we really had three categories of customers we were going after. First and foremost was cord nevers which tend to be millennial and second was cord cutters, and when we talk about cord cutters we’re talking about people that may have cut the cord two or three years ago as well as the ones cutting the cord today. And the final is supplementars which are people who have traditional Pay-TV will take Sling TV on top of it and those are sort in order of how we thought about, how we’d get subscribers and that’s really borne out. So we’re seeing momentum across all three of those categories with our main focus being cord nevers but increasingly as cord cutting continues we’ll see more and more coming from that category. And it wasn’t surprising to us but maybe surprising to many people, there are people who have traditional Pay-TV and will buy Sling TV on top of that.

Your next question comes from the line of Craig Moffett with MoffettNathanson. Your line is open.

Charlie I wonder if you could just reflect on the health of the traditional video business for a moment and you talked about I guess it was a couple of years ago your kids thinking you were crazy to be in video, I know your own subscriber losses were attributable impart to system programming agreement disputes but those subscribers didn’t show up anywhere else in the industry, how much do you feel like we’re sort of seeing the decline of the sector, and is that happening sooner or more slowly than you would have expected. And then a related question on Sling if I could and that is you once said before that the idea of skinny sports bundles without regional sports but with ESPN probably didn’t make a lot of sense for you in the linear business but something must have changed in that that’s sort of where you are with Sling, can you talk about the role of regional sports in the Sling packages if you would?

First I would quite disagree with you I think the losses and subs that we had probably did go to the other players I think one of the reasons I think that Direct TV would probably privately tell you they got a fair share of some of those customers we know they wouldn’t make it Viacom’s down the past for example we got calls from people we never got calls from before so we know that it translated to probably just some cable companies and certainly to Direct TV so I think they’d probably the best, people didn’t stop watching Fox News or CNN or Turner we had kind of back-to-back takedowns of major programmers and those people didn’t -- almost 100% of those people didn’t quit watching TV and if you’re a Fox News guy the only place you really can get it is on linear TV there is really none other avenue for it. So I think [Multiple Speakers].

No I didn’t mean that literally I just meant the sector had its weakest first quarter ever and actually contracted for the first time in the first quarter?

Yes and so then it leads the kind of the health of the industry I think it’s probably I think look it’s mature and if you look at the -- again I don’t have every piece of data that every content owner has or our competitors have but my general sense is that the linear pay television business probably peaked a couple of years ago and that it’s in a very slight decline in terms of number of households that will pay for the big bundle but I don’t see it and it’s not declining as fast as I would have thought it would and so there is -- and the bundle was here for the vast majority of people still the best economic value. And I think that there is creative things being done to continue to make sure that people have good products you see what Verizon is doing to give customers a bit more choice we’ve been doing that for a long time. I think people are going to have products for customers that satisfies their need without having them having to leave the bundle. But I think it’s -- the world is changing and I think I have said it for a long time the younger -- we're missing the generation in pay television and what’s really nice about Sling TV and kind of the second part of the question is that we’re really taking an approach with Sling TV where we had some visions of how we might do it, it ended up being that not all programmers wanted to work with us or weren’t willing to work with us at the time and so we’re really working with the core programmers that we have and the discussion is more about how do we build our business together because almost all Sling television customers are incremental customers for our content partners. And so the discussions are much different than they are in -- if we’re talking about Fox, Fox News they want us to pay a penny more and we want to pay penny less and that’s the extent of the discussion. With Sling TV it’s a bit more about how do we get more customers who aren’t paying for television now, what kind of bundle would it look like, should we do things like pause or look back or should we let me have a network DVR should we -- how do we do advertising, how do we get customers to look at multiple devices, how do we get more minutes from the customer, how do we do data so we know how do we share data so we know better how to serve the customers. Those are conversations where both parties win it’s not a zero some gain and so the admin of Sling TV is probably going to go more the direction of content partners who want to participate within the kind of guidelines that we have today versus whether it’s regional sports or sports. In other words we’d love to have regional sports and Sling Television but I don’t know that you can burden every single customer with the regional sports network when the vast majority of them don’t watch it and it’s very expensive. So, on the other hand the regional sport providers all incremental business to that regional sports provider. So, they had to look at it and decide whether that’s a place they want to go and if they want to go that route I think Sling Television is a great platform to get them there.

Are you concerned that the cost of the EPSN and base bundle sort of makes it so that it’s really only sport fans that are going to be very interested but that sports fans also want regional?

I guess what I would say and make a general statement is that probably within a household a vast majority of people watch ESPN, they may not all watch it every day but the vast majority of the household watches ESPN, I don’t think the vast majority of the household watches regional sports. So I think they are two different animals and of course with ESPN comes Disney and a lot of other channels. So I think that it would be difficult to do any kind of bundle without ESPN. I think that’s not the case with regional sports. ESPN goes across all really goes -- they just have too many events people are going to watch a National Championship football game there is too many they are going to watch the SEC network. The nine states in the south there is no body then watch SEC football. There is people who don’t watch the regional sports network from Tampa. And we have real data on what our customers watch and I think this isn’t Neilson data I mean we have years, and years and years of experience with customers. And ESPN is a valued partner, Disney is a valued partner. They are the company that took a chance on Sling TV and so they’re just invaluable in terms of putting that together.

Your next question comes from line of Ben Swinburne with Morgan Stanley. Your line is open.

I wanted to ask Charlie about the quarter again. How much of the results are related, do you think, to the Fox dispute versus execution? Did any of your competitors actively market the fact that you had lost programming against you in the quarter? Because I noticed the connects were down quite a bit. I'm trying to figure out if that's a piece of what drove that year-over-year decline?

Bernie may want to follow-up on that I will just make a general statement I would say the decline, I would say there is probably three big buckets, one I think the biggest bucket would be that not just Fox but the fact when you take something down there is tail on it several months while customers have decided to leave you and they are still waiting on installation from somebody else even when you bring the programming back. So started really last November and went through kind of mid-January with takedowns so that went on really throughout the quarter although they had tailed off by the end of the quarter. I don’t know that our competitors are actively started to run. And we have Fox TV as with Fox certainly it ran ads more and then certainly connected them and if you are a satellite guy, you know there is another guy called Direct TV out there. So I think everybody else somewhat benefited from that. And Fox is one of the few stations that you don’t to take down but the deal just didn’t make any sense for us and we were prepared to live without Fox and we had lived without Fox we’d lost more customers but we would have gained customers’ long-term because of the cost savings. So we’re certainly prepared to do that. The second bucket would be that I’m looking at the credit scores in an overall economic and I think we’re probably a little less aggressive today than perhaps when Joe was here because I’m looking at to gain a customer long-term and I’m trying to get a customer to make a bonus or get a customer to show to Wall Street because I’m very confident in where we are going. So I don’t need to play to do that. And the third thing is that we are in a transition to APSK modulation scheme which essentially gives us kind of 50% more capacity on our more satellites and we have MPEG2. We have only MPEG4 on our eastern satellite but our western satellites have MPEG2, but they have the ability their APSK modulation on that satellite but we still have MPEG2 only boxes out there that don’t have APSK and so we’re in the middle of a transition or transitioning those customers out and as we transition those customers out there are times either when we touch the customer and we lose them because we don’t touch them correctly or we touch the customer and we lose them because it is a vacation home or it is a customer that hasn’t been paying us so we decide or he calls too many times or he is just not a real good customer for us it’s economical and we may touch the customer out of our system. And so that is going to continue on through the end of this quarter before we do that. The benefit of that is we pick up about 30% of the satellite in additional capacity. So it’s a very meaningful transition for us to pick up a lot of capacity then we can obviously generate more revenue with going forward and have a more modern subscriber base out there than we do today and of course all providers have that problem on set top boxes when you have set top boxes that are 7, 8, 9,10 years old out there your whole system can’t move as fast, and Bernie do you want to add to that?

Yes just add to what Charlie said on the churn side in the quarter most of the variance of churn versus prior first quarters I think was the impact of takedowns and in the case of churn the tail on the takedowns is shorter compared to the acquisition side so we think most of the impact from the takedowns that we saw or potential takedowns we saw have run itself through the first quarter with respect to cord cutting as Charlie alluded to the effect of cord cutting has been much less than any of us would have expected and we do track where our churn customers go and that might have kicked up just a little bit in the first quarter on the order of maybe one point higher but very immaterial on the scheme of things as far as trend goes. On the acquisition side the variance versus prior year first quarters I would say that most of that it's actually due to what Charlie has talked about in terms of credit scoring and qualification rules and we had already started doing this a little bit towards the end of 2014 in terms of honing our profitability model and making sure that all our new subs are indeed profitable every subscriber is a mini investment for us the stock is an upfront investment and obviously the churn is how long we are going to get recurring cash flows to pay off out investment and then our margin on our business is how much cash flow we get for each month and we've been now continuing refine it Charlie I think is putting more of an emphasis on that then ever and that's how the bigger impact on our acquisition side in the first quarter than the Fox. And the Fox impact on acquisitions when we do takedowns like I said the return side is sharper if these are to measure on the acquisition side it's a little bit harder to measure and we think the tail is much longer on the acquisition side so it's smaller but the tail is longer just because it's the perception of that we get a lot of negative price during a PR off course during the takedown off course and the tails are a little bit longer. One thing I failed to mention on churn side is our price increase we do a price increase every year in the first quarter this year was no different we had a price increase going to affect essentially February 1 and the trend we saw from this year's price increase was not materially different than past year's in fact possibly a little bit lower and if anything we think that the churn that we saw from the takedown may have pulled for at some of the churn that we would have gotten in the price increase so that's.

I just wanted to ask one follow-up on Sling, maybe for Roger. How do you think about taking the product to the next level? And I'm curious, particularly on VOD and On Demand content, it would seem it's largely a live linear stream today but VOD is a big piece of probably where you want to go. Can you just talk about how realistic it is to get those rights factored into a $20 price point? And any comment on ad sales? I know you have a small base but it's different because it's streaming and IP. I would imagine there is some opportunities on the advertising side with your avails to do something interesting with this product that you don't do on the DISH linear service?

Sure. On VOD there is actually quite a lot of VOD that's available today I think we need to do a better job of making it easily accessible to customers but with the different programming partners we have now there is probably over 10,000 hours of VOD comp [indiscernible] so we have as Charlie mentioned earlier it's a bidding consistent depending on the channel partner whether we have VOD and what that right and whatever it is today it is frankly the worst it will ever be it's only getting improved because of their channel partners secure the right's that they can grant us or grant us additional rights if they have will be continue to take make that available so I think it started off live an obviously sports so continuing mostly live but as this business evolves you will see probably more and more viewership in aggregate in VOD I mean we already see channels that have lost of VOD content and on demand content frankly the majority of their viewing is of the on demand content not of the live channel. So I'm quite bullish on what we're seeing on VOD. One ad sales there is lot of interest from advertising partners in this model for obvious reasons it's reaching a demographic that highly valued it's also the ability to do to highly targeted advertising. So that's, I mean we're just in the very-very beginnings and frankly the main thing we're focused on right now is making the technology work because it's quite complicated to make the dynamic ad insertion model work in live television especially when you've sporting events with a commercial break, you know you think it's going to be here but somebody called a timeout so it came in earlier than you expected, so all that, the main focus right now is really making sure the technical infrastructure works as it's supposed to and we're seeing no lack of demand for advertisers who want to participate in it, so that will be something we'll ramp up later in the year but right now it’s really more about the nuts and bolts of making it work.

Your next question comes from the line of David Phipps with Citigroup, your line is open.

Can you just talk a little bit about the upcoming 600 megahertz auctions and the AWS auction, as a run up to it you built a substantial cash balance in order to become a big bidder in that. How are you thinking about the upcoming 600 megahertz auction?

This is Charlie, well I think a; we would like to participate, b; I think you know as we said probably last call our focus is on getting through the AWS 3 auction and getting the licenses, the DEs upping the DEs with ever we're asked to do, get their license approved because that auction in my opinion probably has to be a closed out before you can start think -- anybody can really start thinking about the, the incentive auction and obviously one of the undercurrents of motivations that are out there with some of the people that have publically commented on DISH is that there are some that perhaps would like to see that incentive auction you know delayed because there's really only two people that have a little bit in spectrum and they have duopoly in the business if other people aren't allowed to compete with low band spectrum, so obviously to the extent that could be delayed would be a positive, and one way to delay it is to delay the AWS 3 auction results you know potentially even blowing it up. So that's the, that's some of the undercurrents, so we have to kind of get to that process before we think of the next one. But the second thing will be that later this week, people will be able to comment on the rules for the incentive auction and the DE rules, so forth and so on and we think there'll be a lot of comments on that as well because we think there's, there will be things that people want to change, as there always is after an auction, there'll be rule that people want to change about how they perceive the auctions. We'll have to see those rules and see whether it's conducive for us to participate but we have a, we have a core scale at DISH that we understand auctions and they're complicated. The incentive auction will be very complicated because it’s kind of at least two or three auctions, a reverse auction and then a forward auction so it'll be much different, there may be a reserve set aside of some kind, of some amount of spectrum so, you know we're confident that if we participate we can participate at a high level.

Your next question comes from the line of Frank Louthan with Raymond James, your line is open.

Just two quick questions around Sling, what do you think is the right target amount of content at your $20 price point? From the initial launch you've added a little bit of content. Is there an optimal point, do you think, that it will really get some more critical mass and take off? And then longer term how important is a broadband product of your own to be able to really be successful with Sling? Thanks.

Sure, this is Roger. You know we have added quite a bit of content since we launched Sling, so when we launched it, it had 12 channels in the base pack and today it has over 20. And I feel quite good about where we are with that content, I'd say there's not really another content provider that I feel we'd have put in to be successful, I think we have a basic content that we can be successful with today. Doesn't mean we won’t add more but I think we're going to be pretty focused on the price point because that's I think a key to our success too. So when we launched it was a bit skinny but we knew we had other things coming down the pipe and obviously we've launched AME and we've launched AMC and HBO and EPIX and we have started launching Latino. And so our focus is probably going to be more genre tiers to keep more flexibility in it but all in all we are in a pretty solid position right now on the content side.

This is Charlie, we monitor what customers are asking for and there is actually some surprises, and one of the surprising things is that when we look at viewer measurement between say on the DISH side and we look at on the Sling TV side so for example one of the things that jumps out at you is when you have those content providers that give us the ability to pause their programming and give us a look back right so we can start the programming from the beginning, or start the program that you might have missed yesterday when you can do that their viewership goes way up on Sling TV versus what they would get on linear TV with a DISH. So we know that there is things that from a consistency point of view we can improve the product on. There is just no channel that people are -- there is no one channel that people are saying man I got to have this channel or that channel. So I think my personal belief is there is one or two programming content partners I would like to work with that we’re not working with today on IPTV because I just think their breadth of content is compelling and this is just they shouldn’t miss this opportunity and I love working with those companies. So that whether we get there, or not with them we don’t think we need to do it from business perspective from Sling but I think that long-term it would make sense to try to bring them on board and show them what we are doing.

And then Frank on the second part of your question about broadband, in my view the point of being over the top is you can abstract your service from the underlying delivery mechanism I think the risk there is what happens, frankly what the cable companies do and that neutrality to protect online video distributors enough from either predatory pricing or cost subsidization from the broadband service into the video service or data caps or all the many ways they could use their broadband pipe or broadband monopoly to port online video. So it’s a similar we get reasonable protection on that then I don’t personally feel the need to be bundling broadband with an over the top service.

Your next question comes from the line of Vijay Jayant with Evercore ISI. Your line is open.

This is David Joyce for Vijay. Just wanted to touch on the programming, you mentioned how you do have a lot of packaging choices but I was wondering what your view is in light of the new Verizon FiOS programming packs. How similar/dissimilar is that from what you do? Is that something you can do on it? And how could that be applicable both to your core pay TV service and to your Sling TV strategy?

I’ll talk it related to the linear service Roger might talk to Sling service. Each programming contract is different there is some flexibility in programming contracts we don’t know what the Verizon programming contract says. And we don’t know who is right and who is wrong in that dispute. It’s not probably the way that -- and maybe the way I might have handled it five years ago in terms of what Verizon did I wouldn’t do it that way today because I think that ultimately you got to work with your content providers and I think there is just too many opportunities out there today that you can work together on that you probably even if contractually you could something I don’t think we would not only go in and do something would be harmful to one of our content provider. So certainly I have a discussion with them before we would something perhaps that drastic but I think customers are looking for choice, customers are looking for saving some money on video whether the Verizon approach is the right way to do it or not I don’t know I think the way we do it today is still pretty good approach. We have kind of good, better, best packages. We have contractually done it with our content providers, they know where they are in those contracts and they know where they are in those bundles and it is pretty good selection for customers and when we get a bundled product you get discounts as a consumer. So still probably for most customers the best value I think the more concerning thing I think kind of the elephant in the room is all of those customers for the last three or four or five years that have cut the cord or those customers who last 10 years aren’t paying for TV as they graduated from college and they didn’t pay for TV and I think that’s where Roger and Sling TV come in I think that’s a much bigger segment of the market and it’s incremental business and so I think that’s where we’re shining the flash light a little bit more to say look I think that’s a better place to go. Roger?

Our packaging strategy is it’s really is largely about two things, one is to make the price point attainable for people who aren’t willing to pay for the big bundle and two is to get lots of flexibility. But when you see some Pay-TV operators and some of the cable companies now getting more aggressive with their skinny bundles and trading people down so they can try to retain video subs that maybe some people look at it and say similar to what we do I actually don’t think it’s similar. I don’t think this is just about the size of the bundle. If you want to go to a cable company and get a skinny bundle you’re calling your call center and you’re passing a credit check, you’re scheduling your installer to come, you’re signing your tier contract, you’re going through all the traditional Pay TV groups that you have to subscribe if you contrast that with Sling you’re probably most people pick up their mobile phones create their account through their phone and start streaming, right so mobile first service. So even if some traditional Pay TV can be created exactly the same bundle that we’ve done. We’ll still reach different customer bases because of our technology enables us to have a fundamentally different business model and the customers that we’re targeting for it are people that are used to and comfortable consuming content on mobile devices. So obviously we stream to TVs and frankly that’s the majority of the hours of viewing but it’s not the majority of the sessions.

Your next question comes from the line of Tom Eagan with Telsey Advisors. Your line is open.

Just a follow-up on Sling, obviously there are a lot of over-the-top services that could compete with Sling. Roger, what does your research tell you about these 10 million to 15 million OTT or OTA households, like how much do they want to spend?

We did some research in the beginning on price elasticity but honestly Charlie would probably tell me we wasted money during that because we really don’t really understand is that when you launch a service like this there is nothing really to compare it to previously. We felt like the $20 price point for a base pack is really the magic number to fit and we are pretty focused on making sure that we get enough quality content that we can appeal to a broad-enough-segment of the market and at an attractive price point. So, if you’re a cable company you have a very different business objective. You have to get high penetration within a small geographic footprint all right that’s where your economics are driven by. Therefore, you have to construct packaging bundles that can appeal to a broad segment within the geography or the opposite. We don’t need deep penetration in a single geography we can get broad penetration across the entire U.S. or narrow penetration across entire U.S. So that fundamentally should drive a different pricing and packaging strategy which we do deploy in ways that’s an advantage that we have. We don’t need to do what the cable companies are going. We can do something different. We’re not replicating that big bundle because we don’t have to and it enables us to be different which lets us go after this segment that for whom the big bundle is not meeting their needs.

Do you think that your customers are also taking HBO Now and Amazon and anything else over the top?

We know that customers that subscribe so Sling TV are very-very likely they over indexed in subscribing to other streaming services too, that’s shouldn’t be a surprise but -- in the case of HBO they can take HBO out from HBO or many as many of them are doing they are taking HBO from us directly.

And then I have a follow-up. Charlie, with the Friday's appellate court decision out of the FCC, the FCC lost the decision to the programmers, but there's still the implication that the FCC wants to sign the light on the TV network bundle. Do you see any risk to the operators of the industry going more a la carte? Thanks.

Well I think it’s something the FCC has looked at and should look at and Congress should look at. But I think that there is just we think a la carte is a good consumer thing so we’re one of the few companies that have supported a la carte consistently but having said that I think there is real practical ramifications about how you might do something a la carte is a I think certainly I think it’s not just in that particular proceeding it’s not just a bundle of video, I think it’s really I think the bigger problem is a bundle of time broadband maybe bundling broadband or wireless in a way that would be non-competitive to people who have video services over broadband so I think there is other kinds of bundles that might be problematic. So I think it won’t I don’t know whether they’ll look at a la carte not but I think they certainly should will and they probably should look at the different bundling techniques that are out there that are beyond just a la carte.

And operator, I think we got time for one more question.

We will now take our final question from the analyst community. [Operator Instructions] We will begin the media portion of this call following the answer to this final analyst question. Our final analyst question comes from Jonathan Chaplin with New Street Research. Your line is open.

A question for Mr. Ergen, on the last quarterly call you said now that the auction was done the discussions would begin with a host of different parties through which you would decide what to do with the spectrum. I'm just wondering how those discussions have been going, what you've learned during the process, and where your thoughts are on potential uses of the spectrum now. What have you crossed off the list? What looks compelling?

I think there are lots of discussions that have gone on since the auction A, B I think the price primary thing is that the spectrum that DISH already owned is much more valuable than perhaps the analyst community gave us credit for and perhaps much more compliant than you give us credit for today even I think the combination of video and spectrum is compelling. And we’re also learning that the technology, the technology is changing. So, when technology changes basically virgin spectrum is a real advantage and the technology is changing and maybe I will turn over to Tom because you do that more close to that but the technology is changing in terms of how a network would be -- how you might add spectrum to an existing network or how you might build spectrum the technology is changing materially in terms of how radios and the cloud interact or the RAN and the technology changes in terms of how unlicensed spectrum might be used in terms of with license spectrum you’ve heard terms like LAA and LTEU and so position wise we’re in a situation where we always thought it was really good but we know it’s really good and Tom you might want to just give add color to that.

Jonathan consistent with what Charlie said we had non-disclosure agreements with many companies that we’ve been having discussions with since the auction ended. We’re continuing those discussions in parallel with the DEs process that they’ll be moving through with the FCC in Washington. And as Charlie mentioned there are trends that are going on like virtualization and with like unlicensed and licensed working in a complementary fashion. We’re also continuing to work 3GPP and the standards effort to get our bands incorporated. And I mean I think as a backdrop you all know just in the last few months the emergence of things like Periscope and MeerKAT and the various OTT services, we know, and obviously many people in the industry have acknowledged that a lot of those sessions are not only wireless but they’re mobile. So while a good portion of that is occurring over traditional Wi-Fi world with large bid buckets or unlimited data plans the consumption patterns of video consumption over mobile devices on LTE networks continues to grow. So it’s opening up conversations with non-traditional players for us and we continue working those discussions.

So Tom, as you go through those discussions, are you getting more enthusiastic about, a, wholesale model for deploying the spectrum, particularly as guys like Google come into the industry, as well? Or are you equally balanced between deploying it yourself and potentially selling it to one of these guys?

I don’t want to indicate which one has more enthusiasm than the other but we clearly are adjusting all avenues and the wholesale discussion is a increasing priority I think in the minds of some players whose business models are more dependent on high-speed, high capacity, low latency cloud connections.

We will now take questions from members of the media. [Operator Instructions] Our first media question comes from the line of Scott Mark with Bloomberg. Your line is open. Your next question comes from the line of Phil Goldstein with FierceWireless. Your line is open.

Hi, Charlie this is Phil from FierceWireless. I had a question regarding something that John Ledger said in his remarks on their Q1 call he was talking about how they are kind of adjacent industries next to wireless and his exact quote was if content and entertainment and social are moving to the Internet that's where in mobile these adjacent industries are in the same game we are in I think you need to think about the cable industry and players like us as not competitors but potential partners and alternatives for each other in the future so given that kind of stance that T-Mobile have laid out do you see them as a more natural partner and ally in wireless than anyone else or are you still keeping all options open?

Well as you might expect we are keeping all our options open but obviously we admire what John and his team have done at T-Mobile and certainly we follow what they do.

I mean do you think that you -- so his commentary about the adjacent industries to wireless being partners is the right way to think about the industry at this point?

I do generally agree I mean I think the way we’d probably even go a little farther in the sense that if you look at kind of where things are going and that is a long-term, longer terms in the next three to five years if you just look at that kind of timeframe everything has to be basically the cloud is a second brain right so and you go to be connected to that brain to do things and so it’s not just wireless spectrum and video and it's going to be all kinds of other puerperal things that are all going to come together what you get back haul and you get all kinds of informational and entertainment sources that are all going to become through one pipe so and there is consistency of service and how you would do that and how customers can were to rely on that and what they will pay for and what they won't pay for and how unwise is spectrum get used and perhaps the better way then it gets use today so all those things kind of come together you said you have to it's a little bit easy for us to play in that market because we're kind of a new entrant right and it's a probably little easier for T-Mobile to play because or not quite as big and bulky as the big two right so they probably as little bit of volume and what they are doing but I certainly think that I don't know will our paths will across or not.

Your next question comes from the line of Malathi Nayak with Reuters. Your line is open.

Charlie and that you've been back in a CEO seat for three months I was wondering should elaborate a bid on your wireless strategy for DISH moving forward and have you also had a in this month's any talks with Sprint or T-Mobile perhaps in terms of partnerships both those companies seeing eager to work with you so that would be a great if you could just provide some color on that? Thank you.

Okay, well. First I think have been CEO for about 6 weeks and obviously the wireless strategy I've been working on a long time although in time as we are going to lot more on wide of the strategy probably and I'm right now but look I think that I think where we are we can let two time horizons which is little bit longer term but the short-term focus is clearly to answer any questions about the wireless auction that the FFC might have that's a process that's going on through final comments on May 26th that we’re involved in that and then we start looking at the next incentive auction in terms of where that goes and they will obviously that's kind of one side about the longer side of it is to look at is really the same answer to the previous that Phil asked which is how do you put all that together in the system design that's meaningful to the American public and the consumer and something that's makes their life better and something they are willing to pay for and Tom and his team spends a lot of time looking at those things so and obviously I don't think it would be a surprise that we as we go through this process that we probably will be talking to everybody in the industry that would include by definition and T-Mobile and Sprint.

Your next question comes from the line of Shalini Ramachandran with Wall Street Journal. Your line is open.

I had two questions well what ways do you think and AT&T and Direct TV deal going through more effective and secondly cable operators looking more seriously at Wi-Fi first solutions and Google wonder edges how soon do you have to find a partner to enter in the wireless?

Well I didn’t quite hear the first one I think it related to AT&T and Direct to how it might affect us?

Right how do you think it is going to affect you?

Well I mean I think look I think that we believe that we’re probably get back that one that we believe this should be conditions on that merger which we certainly we will make our points known and obviously that will scale and programming in an unprecedented way in the industry they have owned some programming including regional sports and they obviously have a broadband connections to large number of homes so what will have comments on those kinds of things but certainly they will have enough scale that they could cause mischief in the marketplace and to the consumer so we’re hope that regulatory buyers will be vigilant as they have in the past and look at that and decide whether the merger is good for the American public or not and if they decided to get it that it can proceed that they bit remain for conditions on it and in terms of the cable and Wi-Fi I'm not sure did you get that maybe I'll get that one to Tom.

Well the question I think so Shalini was how did the cable Wi-Fi activities influence our timeline and I don't think it does yes we are clearly monitoring what's going on there and I think it's potential solution in some areas and not others I think there is probably a fall back currently and now in most cases but again that's not really impacting our timeline.

I think operator, we have time for one more.

Your last media question comes from the line of Mike Farrell with Multichannel News. Your line is open.

I got two really quick ones. I'm just wondering just along the line of consolidation that is happening going to happen does the Charter Time Warner Cable combination present more problems to you then a Comcast TWC merger would have and just one additional thing just on the overall concept of bundling do you see kind of the bundle starting to loosen up enough where distributors are actually having an advantage in negotiations now and just how are along those lines how are your Viacom talks going?

Let me take the first part of question Charter Time Warner so they do a transaction we certainly look at that transaction and see and I'm sure just like that the regulatory files look at it each transactions it's a little bit different obviously Chatter and Time Warner bring different things to the parties then Comcast Time Warner the least of which is this Comcast owned NBC. So they there is all the section of business in the content side that I don't think Time Warner has today or the Charter has today so there will be differences but they are also be other things that are more problematic in a different way.

I was just thinking of just from the concept of their more real footprint would that have more of a direct impact on you if they got if Charter itself got stronger and could get more aggressive?

Well I think they are pretty strong and aggressive now so but look I had to look at anything I don't want anyone to prejudge anything in terms of what I think we have always looked at it with a pretty fair and open mind and we’re trying to compete and as long as we are allowed to compete we are okay with most things is just where there is things that don’t allow you to compete that we like to point those things out. As far as the bundle I would say I've seen it's a good question I'd say in general the tail has moved a little bit more in the distributors favor but I’d still in the content owner still has some advantages and it is probably a little stronger than in negotiations than a distributor but I think it has moved in the distributors direction some because you just can't force there comes a tipping point for content providers when it's a $100 a month that you lose more subscribers than you gain and so you start missing our guys say you start missing a whole generation and it's hard to get it back and there is channels in the top-20 channels that Sling TV doesn't have and our customer the Sling TV customers aren't asking from them for the most part. So, that makes it finishing when we get to distribution negotiations with providers we are on with real data in terms of the effect it will have on our business I mean we knew Fox News was going to have an effect on our business right and we were it was probably the number two 2 channel we would never want to take down as a company, but will take anything down if it's a horrible deal because it cost you more money than you say so that there was a horrible deal so that's why it went down and if we get a horrible deal in the future with somebody based on our data we will run the economics and we feel very confident running the economics to what whether if taken something down make sense or not you don't I always tell my people here if you can take some down be prepared to live without it forever otherwise don't take it down so ESPN is being number one thing I would want to take now Fox is prime number two Fox News is probably number two.

So talks with Viacom are going on and looking [Multiple Speakers]?

We're not going to have a discussion of Viacom in the public domain other than much we've had a great long-term relation with Viacom and their value partner we just did a deal with EPIX that with them I think last quarter or maybe a quarter before so you did get long-term relationship there obviously there are distribution of their content is a bit more dilutive now and if you are a Netflix customer and you can watch Sponge Bob or something maybe you don't place a bigger value on linear side so that it depends on the strategic direction of what of how content players go but Viacom's is fairly well distributed in the most platforms out there so but we have take that in consideration when we look at it for our platform. All right, I think that's [Multiple Speakers]. All right thanks everybody for joining.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.