EchoStar president and CEO Hamid Akhavan highlighted a capital infusion, debt restructuring and a Federal Communications Commission extension for the build out of its greenfield 5G network as potentially game changing results in Q3.

CFO and EVP Paul Orban cautioned on the company’s Q1 earnings call in May that it was facing $2 billion in debt maturing on 24 November after it covered a $1 billion payment in March.

At the time, he stated the company didn’t have the cash on hand to pay off the maturing debt.

Through a series of transactions and balance sheet restructuring, EchoStar now has the funding in place to meet its commitment and to continue building its open RAN 5G network.

The transactions include around $5 billion in debt restructuring and the addition of “$5.2 billion of fresh capital” to its balance sheet for “investment in [a] nationwide open RAN 5G network and other general corporate purposes”.

It also announced, “the successful completion of various transformative strategic transactions positioning its business for the further enhancement of its nationwide open RAN 5G Network”.

“We ended the third quarter with over $2.7 billion of cash remarkable securities, including our restricted cash,” Orban said on the earnings call. “We will fund the $2 million of debt return this week from this restricted cash.”

EchoStar previously stated the sale of its Dish TV satellite business and Sling TV streaming division to DirecTV combined with $2.5 billion in new financing from investment company TPG Angelo Gordon provided the needed cash to pay down the debt maturity.

Akhavan expects the deal with DirecTV will close in late 2025, but even if it doesn’t “we now have a more robust foundation to operate and grow EchoStar’s business, independent of the exchange outcome”.

MoffettNathanson senior MD Craig Moffett previously predicted EchoStar-owned Dish Network could go bankrupt by the end of 2024.

He stated in a research note EchoStar’s Q3 results “were predictably awful,” and that there is no certainty the DirecTV deal will close. DirecTV, which is being sold to TPG, will assume about $9.7 billion of Dish’s net debt if the deal goes through

Q3 metrics
Wireless subscribers, excluding the government’s Affordable Connectivity Programme (ACP), rose by 62,000 year-over-year, totalling 6.98 million.

However, net subscribers decreased by 297,000, up from a loss of 225,000 last year primarily due to the end of ACP funding on 1 June 2024. Wireless churn rate of 3.9 per cent improved by 29 per cent.

EchoStar combined its prepaid and post-paid Boost brands under the single umbrella of Boost Mobile in July.

Retail wireless revenue of $895 million increased from $890 million while revenue from its greenfield 5G network rose to $43.2 million compared to $29.9 million.

Akhavan said more than 50 per cent of all new device sales in Q3 are being activated on the Boost Mobile network. It also reached a deal with Apple in Q3 to allow its customers to purchase and activate the Boost Mobile service through Apple retail stores, Apple’s website and its app store.

John Swieringa, president of technology and COO, stated Boost Mobile will provide 5G broadband access to more than 80 per cent of the US population by year-end

EchoStar has MVNO agreements in place with AT&T and T-Mobile, which it stated enables coverage to 99 per cent of the US population.

“Today, the Boost Mobile network covers over 250 million Americans with 5G broadband and more than 208 million Americans with 5G voice,” Swieringa said.

EchoStar will expand its 5G Voice over New Radio (VoNR) service to three additional markets over the coming weeks to bring its coverage to more than 216 million by year-end.

Revenue of $3.9 billion was down 5 per cent from a year ago. EchoStar posted a net loss of $141.8 million compared to $133.3 million.