EchoStar Transforms: Sells Key Assets, Partners with SpaceX, Focuses on Connectivity
EchoStar has undergone significant changes following investigations into its spectrum holdings. The company has sold key assets and formed strategic partnerships, focusing on satellite connectivity and communications.
EchoStar's journey began with divestments following FCC investigations. It sold 600-MHz spectrum to AT&T and ordered 100 satellites from MDA Space. Then, in a major transaction, EchoStar sold its entire portfolio of AWS-4 and H-Block frequency licenses to SpaceX for about $17 billion. This included up to $8.5 billion in cash and an equal amount in SpaceX shares, significantly altering EchoStar's portfolio and reducing its debt.
Through this deal, EchoStar obtained SpaceX stock and access to Starlink D2D services for Boost Mobile. Despite abandoning low Earth orbit D2D constellation plans, EchoStar remains committed to satellite connectivity and communications. CEO Hamid Akhavan has stated that the company will use additional capital and opportunities to expand its aperture. EchoStar is seeking to expand its communications business as an 'asset-light growth company', following regulatory pressure.
EchoStar is maintaining its S-band frequencies service over Europe using a geostationary satellite, despite uncertainty about the spacecraft's future due to the SpaceX deal. Financially, EchoStar had about $4.3 billion in cash before recent spectrum sales, and will have about $24 billion in cash and $13 billion in debt after transactions close.
EchoStar will continue offering communications equipment through Hughes Network Services and entertainment/mobile services through Dish Network, Boost Mobile, and Sling TV. Despite the changes, EchoStar's chief operating officer Paul Gaske expressed hope to maintain European service for existing customers, ensuring business continuity.
