Dish Network Corp <DISH.O> reported first-quarter revenue that fell short of Wall Street estimates on Tuesday as more satellite TV subscribers cancelled their packages and revenue per customer declined as viewers chose cheaper online options.
Dish's pay-TV service shed 94,000 subscribers in the quarter, while subscribers for streaming service Sling TV rose by 91,000.
Shares of Dish slumped 9.6 percent to $30.66 in afternoon trading, hitting a 5-1/2-year low.
Dish has been trying to lure young viewers to its $20-per-month Sling TV as it battles cord-cutting in its satellite-TV services, with viewers moving to competitors like Netflix Inc <NFLX.O> and Amazon.com Inc's <AMZN.O> Prime Video.
Average revenue per user in Dish's pay-TV business fell to $84.50 from $86.55.
Craig Moffett, an analyst with MoffettNathanson, said in a research note that Dish's average revenue per user could experience more pressure in the future, as so-called skinny bundles, including the company's own Sling TV, cap its ability to raise prices.
Average revenue per Sling TV user was $25 in the first quarter, Moffett estimated, much lower than Dish's traditional TV customers.
Dish said in an investor call that revenue and margins on Sling TV customers are increasing and it expects the trend to continue.
Dish is also working to build the first phase of an Internet of Things network, which will be the first step to building a nationwide 5G network, Chairman Charlie Ergen said on a conference call.
The company has been acquiring a stockpile of spectrum, or airwaves that carry data.
Every industry will need 5G to power new technologies like artificial intelligence and autonomous cars, and Dish is in a good spot to offer it, Ergen said, though he acknowledged there is investor scepticism towards the company's efforts to build a network.
Net income attributable to the company fell to $368 million, or 70 cents per share, for the quarter ended March 31, from $376 million, or 76 cents per share, a year earlier, narrowly beating Wall Street expectations.
Analysts had expected net income of 69 cents per share, according to Thomson Reuters I/B/E/S.
Revenue fell to $3.46 billion from $3.68 billion last year.
Analysts on an average were expecting revenue of $3.5 billion, according to Thomson Reuters I/B/E/S.