Echostar made changes with Hamid Akhavan who served as president and CEO of the company into chief of EchoStar Capital, and co-founder Charlie Ergen as its new CEO following the formation of a new business called EchoStar Capital. EchoStar Capital will be responsible for investing new capital from the recent spectrum transactions to fuel future growth opportunities for EchoStar Corporation.
Ergen now assumes the operating responsibility for the pay-TV and wireless business units.
“EchoStar will soon be in the unique position of having substantial available capital, vastly changing its scope of opportunities,” Akhavan stated. “Through EchoStar Capital we will fuel EchoStar’s growth into new and complementary arenas, beyond its successful pay-TV, wireless and enterprise business units.”
The transaction builds on the $17 billion agreement the companies entered into in September when Elon Musk-owned SpaceX agreed a $17 billion deal to buy EchoStar’s highly sought AWS-4 and H-block spectrum licenses after pressuring it to sell off the assets earlier this year. The deal will close after receiving customary regulatory approvals.
SpaceX’s financials indicate it will pay EchoStar $8.5 billion in cash and up to $8.5 billion in SpaceX stock. The company also agreed to fund a total of about $2 billion in cash interest payments on EchoStar’s debt through to November 2027.
With the new spectrum sale to SpaceX, Akhavan said, “This transaction with SpaceX, in addition to our previously announced spectrum transactions and commercial agreements, will strengthen EchoStar’s ability to develop new business opportunities and growth in value for our shareholders. The combination of AWS-3 uplink, AWS-4 and H-block spectrum from EchoStar with the rocket launch and satellite manufacturing capabilities from SpaceX accelerates the realization of powerful and economical direct-to-cell service offerings for consumers and enterprises worldwide, including our Boost Mobile customers.”
EchoStar added 232,000 Boost Mobile wireless subscribers in the quarter compared to a loss of 297,000 a year ago. Revenue for the wireless business came in at $938 million, compared to $898 million.
EchoStar’s 9-month total revenue was $11.21 billion. EchoStar’s Hughes division deliver $346 million in revenues for Q3 and held 783,000 subscribers.
In its Q3 earnings results, the company reported a $16.5 billion impairment charge from decommissioning parts of its 5G network that are no longer needed for its Boost Mobile service following spectrum sales to AT&T and SpaceX. After these sales the Federal Communications Commission (FCC) ended its investigation into EchoStar’s use of spectrum. EchoStar stated it was moving to a hybrid MNO model after selling off the spectrum licenses.