With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

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This year's Fortune 500 marks the 66th running of the list.

This year's Fortune 500 marks the 65th running of the list.

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This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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EchoStar Corporation is a provider of satellite communication, TV, internet, and mobile phone services. It was founded in 1980 by Charlie Ergen, Candy Ergen, and Jim DeFranco as a C-band satellite dish distributor. Since then, it has grown to acquire the Dish, Sling TV, Boost Mobile, Hughes, Hughesnet, and Jupiter brands in the U.S., Australia, and Europe. The company claims to have invented the first consumer TV digital video recorder. In addition to consumer television and phone service, the company serves other telecommunications providers, aeronautical services, and civilian and defense government agencies on an enterprise basis.

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EchoStar (SATS): Company Profile, Stock Price, News, Rankings

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EchoStar

echostar

Greetings. Welcome to the EchoStar Corporation Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. A question and answer session will follow the formal presentation. Please note that this conference is being recorded.

At this time, I'll now turn the conference over to Dean Manson, Chief Legal Officer. Dean, you may begin.

Thank you, and welcome to EchoStar's second quarter twenty twenty five earnings call. We will begin with opening remarks from President and CEO followed by Paul Orban, EVP and Principal Financial Officer and John Swearinga, President of Technology and COO. We request that any participant producing a report not identify other participants or their firms in such reports. We also do not allow audio recording, which we ask that you respect. All statements we make during this call other than statements of historical fact constitute forward looking statements made pursuant to the Safe Harbor provided by the Private Securities Litigation Reform Act of 1995.

These forward looking statements 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 the forward looking statements. For a list of those factors and risks, please refer to our annual report on Form 10 Q, the quarterly report on Form 10 Q for the quarter ended 06/30/2025 filed today, August 1, and our subsequent filings made with the SEC. This information and supplemental materials related to today's call will be posted on our Investor Relations website. All cautionary statements we make during the 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 any undue reliance on any forward looking statements.

We assume no responsibility for updating any forward looking statements. We refer to OIBDA and free cash flow during this call. The comparable GAAP measure and a reconciliation for OIBDA is presented in our earnings release and in the case of free cash flow in our 10 Q. With that, I'll turn it over to Hamid.

Thank you, Dean. Welcome everyone. Thank you for joining us today. I would like to address a few notable items from the second quarter as well as an additional recent development.

As we have said in our SEC filings on May 9, the FCC informed us that it had begun a review of our spectrum licenses. This includes a review of certain obligations to provide five gs broadband service, the September 2024 build out extension granted by the FCC and our exclusive rights to the AWS four band. This event and the inquiries it introduced have led to considerable amount of uncertainty over our spectrum rights. It has effectively frozen our ability to make decisions about our five gs terrestrial network build out, has materially impacted our ability to implement and adjust our overall business plan and has required us to reevaluate the deployment of our resources. As a result of the FCC's inquiry, we chose to delay several of our scheduled interest payments.

We submitted detailed responses in the various public proceedings the agency launched back in May. As explained in our responses, we strongly disagree with the factual and legal basis of the FCC's inquiries. On June 11, our chairman met with FCC Chairman Carr and explained how the FCC's actions threaten our viability. Following this meeting, President Trump encouraged the parties involved to reach a positive resolution. Due to the nature of our ongoing discussions with the FCC, government and other entities, we chose to make our delayed interest payments within the permissible grace periods.

In addition, today we made the due payment for our HSSC bonds. Since then, we have had numerous collaborative conversations with the FCC, the administration and various parties to try and reach a constructive solution that is beneficial to EchoStar and consumers while also addressing the FCC's wishes and fosters U. S. Leadership in telecom. It is our highest priority and a huge focus of the leadership team including myself, but given the ongoing nature of this issue, I can't say more or get into any specifics today.

The commitment to securing our future and promoting U. S. Leadership in the global communications industry is a top priority. In an exciting step towards that goal, we've announced an agreement with MDA Space for them to be the prime contractor for our new LEO Direct to Device or D2D satellite constellation. This new constellation will enable EchoStar to provide global wideband services directly to standard five gs and TN devices such as popular Android and Apple and other compatible IoT products and help foster U.

S. Leadership in D2D connectivity and the space economy. The constellation is enabled by our global S band spectrum rights which includes exclusive US rights for AWS four along with the 30 megahertz of S band, two gigahertz of SS rights in Europe and similar magnitude of spectrum around the world. These spectrum rights, our technological leadership and our strong service delivery capabilities will allow us to provide the dedicated capacity and security services that are in demand by consumer, enterprise, public safety and government sectors within The US, Europe and the rest of the world. Since 2012, EchoStar has invested well over $13,000,000,000 in the S band beginning with acquisition of two of the original MSS operators DBSD and TerraStar who held S band FCC licenses as well as three geostationary satellites which are in operation today.

We also led the efforts to include the S band in the three gs PPS standard to allow for satellite compatibility with off the shelf handsets. EchoStar's total investment includes the acquisition, integration, deployment and operation of the AWS four band as part of its five gs open RAN network in The US. EchoStar's new LEO constellation will utilize up to 25 by 20 megahertz of AWS four slash S band spectrum. And we will be fully compliant with the newly created NTN and 3GPP standards, allowing EchoStar to provide messaging, voice, broadband data and video services upon launch to all devices with the current 3GPP NTN specification without modification. This is true five gs mobility.

This wideband service is a fundamental improvement over the existing satellite messaging and SOS services. Launch of the satellites is planned for 2028 with commercial services starting in 2029. Initial configuration of the system consists of 200 satellites rapidly growing from there to provide continuous growth of capacity globally. Peak funding of the project is estimated to cost $5,000,000,000 which will be self funded by EchoStar. As we said, when we merged EchoStar and DISH in 2024, a key goal was to unite the spectrum and technological assets across both companies to realize our vision of a global D2D service seamlessly integrated with terrestrial connectivity to everyone.

We look forward to sharing more details on this project in September at World Space Business Week in Paris. I'll now comment on some details across our lines of business. Our wireless segment continues to perform well as we executed on another quarter of sequential growth with 212,000 subscribers net adds in the period compared to a 16,000 net loss in the same period of twenty twenty four. Boost Mobile continues to focus efforts on driving profitable subscriber growth and delivering an exceptional customer experience with better value than the established carriers. The quality of our subscriber base continues to improve as evidenced by churn of 2.69%, an improvement of 24 basis points year over year and an industry leading level of prepaid ARPU.

A significant factor in this success is our net port positive performance. These efforts led to us ending the quarter with approximately 7,400,000 subscribers. Our broadband and satellite services segment offers market leading products and services to a wide range of consumers, enterprises and governments throughout the world. Our technology leadership in satellite, networking and broadband services enables us to provide advanced communication services and solutions fueling an 8% increase in our enterprise committed contract volume year over year. On the aero front, we are pleased to be recently selected by two large airlines to deploy our Hughes in flight connectivity solution in their fleets continuing our penetration in the market.

Our inflight connectivity business provides the aero industry's only future proof solution by leveraging multi frequency LEO GEO satellite networks with multiple connectivity providers to offer airline customers a unique flexible and cost effective solution. We have made significant advances with our in flight product offerings such as inline fit production capabilities and selection by Airbus to offer joint service technology solutions to their customers via their HPC plus in flight connectivity program. In the second quarter, Hughes also received the AS9100 quality certification, a complement to the numerous FAA certification milestones for products we have received over the past year. We are pleased with the success of this business unit and are optimistic about future global opportunities in this market. Finally, our HughesNet consumer business, we closed Q2 with approximately 820,000 broadband subscribers delivering higher ARPU as a result of focusing on higher value customers.

In regard to our Pay TV business, we remain steadfast in acquiring and retaining the most profitable subscribers despite headwinds in the Pay TV landscape from new service entrance, M and A activity and the overall cost of programming. DISH TV finished the quarter with approximately 5,300,000 subscribers. Churn continues to be at its lowest levels in more than a decade, excluding the pandemic, while viewership is up eight percent year over year. For the quarter churn was 1.29%, a reduction of roughly 11 basis points from 2024. Our customers appreciate our exceptional product and the performance we are able to deliver as is evidenced by this decrease in churn year over year.

Pay TV also grew its ARPU 3% year over year. In spite of the highly competitive headwinds in the streaming market and lower tuning events across the sports and politics, Sling viewership increased 18% year over year. Additionally, Sling's streaming quality reached an all time high increase in our industry lean performance measured by Conviva. We closed the second quarter with approximately 1,800,000 Sling subscribers. Now I would like to turn it over to Paul Horbord for commentary and color on the numbers.

Thank you, Hamid. Revenue was approximately $3,700,000,000 in the second quarter, a decrease of 5.8% year over year. This decline was primarily due to fewer subscribers at our Pay TV and Broadband and Satellite Services segments, partially offset by increased ARPU at our Wireless segment. OIBDA was $280,000,000 in the second quarter, a decrease of $163,000,000 year over year. The decrease in OIBDA was primarily driven by fewer subscribers in Pay TV and an increase in operating loss in Wireless due to our increased subscriber acquisition efforts and enhanced network coverage.

Through the first half of the year, EchoStar generated $166,000,000 in positive operating free cash flow. This is defined as free cash flow before debt service payments and non operating CapEx related to EchoStar 2526. Free cash flow includes debt service or free cash flow including debt service was negative $739,000,000 for the second quarter compared to negative $191,000,000 in the prior year. This $548,000,000 decrease was primarily due to $326,000,000 in higher cash interest, 163,000,000 decrease in OIBDA and changes in working capital, partially offset by $56,000,000 in lower CapEx. In Q2, we paid $777,000,000 in cash interest, significantly higher than the $236,000,000 paid in Q1. This increase reflects the timing of interest payments related to the capital we raised at the end of last year. Going forward, you'll notice a pattern where cash interest payments will trend lower in Q1 and Q3 and higher in Q2 and Q4.

As a result, our free cash flow will also follow this seasonal cadence. We continue to expect positive operating free cash flow for the full year as we remain disciplined in managing our operating cost structure, we're growing our wireless and huge enterprise businesses. As of 06/30/2025, our total cash and marketable securities, including restricted cash was $4,700,000,000 a decrease of $711,000,000 compared to the prior quarter. This decrease primarily resulted from $739,000,000 of negative free cash flow and $167,000,000 of debt repayments. This was partially offset by the issuance of an additional 150,000,000 of our 10.5% senior notes due $20.29 and $47,000,000 of proceeds related to the sale of our fiber business.

In our 10 Q, we have included a going concern qualification. Please read the statements contained in our 10 Q to see the precise disclosure, but to provide some color, the accounting rules require us to project our cash position one year from our filing date. The rules do not allow us to consider any new funding sources unless that financing is committed at the time of our filing. There are two maturities due within one year of this window. 2,000,000,000 due at DDBS on 07/01/2026 and 1,500,000,000.0 due at HSSE on 08/01/2026.

We believe we have adequate time to address these maturities. Now turning to our segment performance. Total wireless revenue in Q2 increased by 4.7% to $935,000,000 This was driven by a 4.1% increase in ARPU to $3,007.40 dollars mainly due to a shift to higher priced service plans and increased sales of value added services. Equipment sales and other revenue increased by 3.1%, driven by the sale of higher priced devices, including a greater share of compatible with our five gs network. Wireless OIBDA loss increased to a negative four fifty two million dollars compared to a negative $394,000,000 last year.

This was due to higher marketing expenditures and increased costs to support the expanding footprint of the wireless network. We added approximately 212,000 net subscribers ending the quarter with just at 7,400,000 subscribers. This increase in net adds was driven by historically low churn rate and higher subscriber acquisitions. Pay TV revenue decreased 8% to 2,500,000,000.0 due to a lower average subscriber base, partially offset by a 3.1% increase in ARPU. Pay TV OIBDA decreased $663,000,000 from $753,000,000 in the prior year.

This was driven by a lower average subscriber base and higher programming cost per subscriber, partially offset by a decrease in SG and A. This SG and A decrease was a result of lower marketing expenditures, fewer gross new DISH TV subscriber activations and reduced costs support pay TV. Broadband and satellite services for VSS revenue decreased by 13.8% to $340,000,000 This was primarily due to lower sales of consumer broadband services and enterprise hardware sales. BSS OIBDA decreased by 17.8% to $68,000,000 primarily due to fewer consumer broadband subscribers, partially offset by lower bad debt expense and lower marketing expenditures. With that, I'd like to hand it over to John to cover our Boost Mobile Network.

Thanks, Paul. Experience on the Boost Mobile Network continues to receive accolades from customers and third party network benchmarking companies. Most recently, OpenSignal ranked our network as the best in five gs reliability and five gs coverage in over 1,200 towns and cities. We provide five gs broadband coverage to more than 80% of The U. S.

Population. And in combination with our partner networks, we offer customers 99% coverage across The US. We continue that focus on activating an increasing percentage of new customers directly on the Boost Mobile Network, as well as upgrading existing customers to our growing portfolio of Boost Mobile Network compatible devices. Last quarter, we expanded our device portfolio to include the iPad, Apple Watches and Android tablets, including our first Boost exclusive Celero five gs tablet. Today, we have over 1,550,000 customers on net and are loading more than 75% of compatible devices on our network in the accelerated markets.

As Samid mentioned earlier, the FCC's review of our previously approved September 2024 network build out extension has introduced uncertainty around our spectrum rights, which has pushed us to suspend furthering our five gs network build out. Therefore, we have little to report regarding network expansion within the second quarter. Until this matter is resolved, we are focused on continuing to optimize the network infrastructure in place and continuing to add customers to our network. Wireless CapEx in Q2 was 171,000,000 We are not providing network CapEx guidance for the second half of the year at this time. However, we are finishing construction for certain cell sites that are in process.

As a company, we have always had the vision of delivering global connectivity seamlessly integrated between terrestrial and non terrestrial connectivity. We built the world's first five gs standalone open RAN network and have been applying this technical know how to integrate five gs terrestrial connectivity in coordination with NTM services, specifically with the new LEO constellation across our AWS-four spectrum in The US. EchoStar and Boost Mobile's extensive experience in building and operating satellite services and terrestrial mobile five gs networks uniquely positions us as a telecommunications company at a truly global scale. We look forward to continuing the important work of helping the administration and FCC continue to deliver for the American people. Now I'd like to turn it back to Hamid for a few short closing comments.

Thank you, John. We are pleased with the overall performance for the second quarter and are optimistic about our opportunities in the 2025. We remain focused on hitting our operational targets of positive operating free cash flow, optimize subscriber profitability from our pay TV segment, expansion of Hughes' enterprise business and continued growth from Boost Mobile. With that, we'll open it for Q and A from the analyst community.

Thank you. We'll now be conducting a question and answer session. Session.

You. And the first question is from the line of Rick Prentiss with Raymond James. Please proceed with your question.

Hey. Couple of questions. Hamid, I'd like to start obviously on the news of the day, the non terrestrial network directed device LEO constellation. And we've known for a long time, you and I've chatted about the S band and the value it could have and but it would take some capital to to operationalize or monetize it. Questions I've got on on the on the non terrestrial network is, is this a decision that you're then are going it alone or is there a potential for more partners?

The service level sounds like you want to do more than just messaging. You want to get to two gs, three gs, four gs, five g. How will you go to market? It's a crowded marketplace. There's a lot of people talking about it.

Do you anticipate going direct to consumer, via carriers, via OEMs? And also maybe can you lay out a little more of the pacing of that $5,000,000,000 peak funding?

Great. Seven or eight great questions in one. One asked, I'll sort of parse it out to the best of my best of my ability. If I miss any part of it, we'll come back to it. Let me start with one of the middle parts you mentioned is a crowded market.

I wanna say that there's no one, no one today, no one today and no one on the road map today we see that is going to do wideband. We are the unique one. Everybody that today let let me let me parse this out for you guys. When we talk to satellite connectivity, there are three different completely different products sets of segments. One we call broad white broadband, and that is connectivity from a space to a dish.

An antenna that usually is mounted, whether you can move it or not, that's a different story. But it's an antenna that is on the ground, some very unique piece of equipment, whether it be our HughesNet antenna that is there, whether it be, you know, somebody from Wi Fi has one, Starlink has one, others have Kuiper will have some. That replaces your broadband connectivity at home or broadband connectivity in some other location. Then you have the narrowband on the far right end of the product set which is messaging or SOS. Apple has that.

We have that in Europe. We have had it for a long time in Europe. It's being sold not under our own brand but we allow other people to sell it. We'll be offering that in The U. S.

We have always had the capability using our geostationary satellites. Starlink and T Mobile offer that today and Apple and Globalstar offer that today. That's messaging and SOS. And then you got something in between that is ours and we call that wideband and that is a natural use case of your mobile phone the way you use it today. It is not messaging only, it is not SOS, it's not a stationery, it's in your pocket, it's in your purse, it's in your briefcase.

You move around anywhere in the world, maybe on the top of the mountains or in the middle of the oceans or in the middle of Frankfurt or in the middle of Toledo, you're going to get the same connectivity to the satellite and you will not be able to tell the difference whether it's connected to the satellite, which is the cell in the sky, or is it connected to the cell in your neighborhood. That nobody else has. And nobody else is ahead of us. I want to be very clear about that. And so there may be a lot of confusion about this marketplace is crowded perhaps crowded in the broadband space, maybe crowded at some point in the narrowband space, but it's zero crowd right now in where we call wideband, and we are doing it.

Why are we unique in doing that? I can give you five reasons. The first of it is that we have the unique election rights around the world nobody else has. And second we are focused on five gs, NT and the standardization which we have worked very hard to standardize and develop for our spectrum piece, marrying it to our AWS-four and S band so that you can have this exact same architecture as five gs that we have in our network on the ground in the sky, moving the cell from your neighborhood to the sky. That's all we're doing which is very simple in concept, Obviously takes incredible amount of work that has been done for over a decade to to materialize.

But I want to say that nobody else is doing that and that's my claim and you can quote that. Now coming back to going alone, we partners look at this point we believe we have everything in house to make this happen. But we have never been close to partnerships, never on any part of our business. Today we are a great partner of many, many governments and countries and airlines in our Hughes business. We are absolutely appreciated across the world.

Welcome everywhere from Brazil to Europe to Far East. In Middle East, we have been a stable supplier everywhere in the world and we continue to be the trusted partner of everyone. And we are not planning to take this to market in a way that would discriminate against the carriers. Our business model relies primarily on a wholesale model, a partnership relationship with every carrier around the world in a non discriminatory basis. We want to make this available to 8,000,000,000 people in the most easy, cost effective and convenient way.

That is our target. And we believe we are well on the way of doing that. Remember, the system is going to continue to grow both in terms of number of satellites, and in terms of capabilities and technological improvements that are, absolutely, relevant and usually available in the telecom industry in a very quick fashion when you invest into them. In terms of expenditure, we talk about a peak funding of $5,000,000,000 You can imagine that that $5,000,000,000 is not due day one and when the satellite is going to be in service '29. So you have to assume that there's a typical payment schedule for the industry.

We can't disclose any of that for both confidentiality and other reasons. But you can imagine that's over a longer price horizon. But I also want to say that the system is in perpetuity after that peak funding in our business model self funded. So this is not one of those cases where as we increase the satellite number, as we enhance the capabilities of the satellites and we launch new ones, that we need additional injection of capital. Our business model easily self funds all of that R and D and additional expansion.

So we expect that this be a one time $5,000,000,000 investment and again the one time investment is a spread over a window of time with a peak funding calculation to be $5,000,000,000 as of that point after the peak funding on a typical business model you start paying down what you have already paid. So it goes it starts paying back. I hope I answered the six or seven questions you're all in there, if there's any piece that I missed, to talk about.

Just one other ancillary, then I'll go to the five gs network question. Do you envision this as a replacement for terrestrial wireless, a complement to terrestrial wireless? How would you envision how this would fit into the marketplace?

The answer is yes. Like every other technology, this will start being in our vision and view, this starts being a complement to every terrestrial network out there. It's not trying to replace a terrestrial network. It'd be a great compliment covering seventy-eighty percent of the world's surface that is never possible or economically viable to cover terrestrial. But as the technology becomes more capable and the amount of capacity from the sky becomes much, much larger than is very, very initial version, which by the way comes very quickly.

When we're talking about versions and generations, you can imagine they're only a couple of years apart. These are not like five g, six g, four g that are ten years apart. You can imagine, you know, batches of satellite being only eighteen months apart, they're two years apart and they go up. So the technological generation, if there is such a thing in this case, very rapid. So very quickly in a short few years, we're going get to know that the satellite capability will be far, far larger.

As a result of that, it will eliminate the unnecessary heavy cost structure and a burden on a carriers covering very lightly populated rural areas, highways and roads, the rural roads where it really is uneconomical. As you know, a great portion of a carrier's network is uneconomical. They're doing that just to, you know, have the service for people who travel rarely and occasionally through. And that just become a necessity. But once the satellite capability goes higher, you could eliminate hundreds of thousands, potentially millions of cell sites that are not green, not cost effective, not friendly, hard to maintain, they need air conditioning in the middle of a desert and a bunch of other things.

And all of those things go away. So the answer, very long answer to a short question is it starts as being a very good compliment, but over time it can relieve the carriers from the obligation and the cost structure to pay for those sites. In fact, the biggest beneficiaries will be terrestrial carriers that they can have the great service without having to actually pay the cost structure in the longer term. But in a short term, I just want to say that the initial version will be a 100% compliment. It is our intent to work with every carrier around the world on a non discriminatory and very friendly, business enhancing fashion.

We will be we absolutely will be complimentary for every carrier's business model.

Great, I appreciate the color. Thanks guys.

Our next question is from the line of Walter Piecyk with LightShed. Please proceed with your questions.

Thanks. I guess let's bring the dialogue back to Earth on this one. You know, chairman Pai or excuse me, chairman Carr has said there's really not a need for four network operators in the market. Obviously, there's stuff in the press about best and final. I know you said in your prepared comments, you can't really talk about it, but you have suspended capital payments on the network.

So I guess if we just assumed that these things get resolved, you get funding, right, because you do have a going concern and which you address that you can hit those, you know, it doesn't factor in additional capital you brought in. But but the result of whatever's going on with CAR and the FCC is that you remain a network operator. I know that's not necessarily assured one way or another, again, depending on how things play out. What is the go to market strategy as a as the fourth network operator? And does and do you think that that at this point requires a major distribution partner?

Because it seems like with with gross ads insured up, you know, across the three operators, there is an opportunity. It doesn't feel like cable is that alternative because based on what Brian Roberts said on his call earlier this week, doesn't necessarily want to partner in that way or own assets. So, like, how does it like how does this work if you remain a network operator?

Thank you for again many questions Walter. So as I mentioned I cannot be specific Much of that is in play today in terms of our discussions with FCC. I will certainly not comment on whether the market needs three players, four players. All I know is that I am the fourth player and until change of things note, I'm notified to do something different.

My head is about down in the, in the weeds running the best business I possibly can as a fourth player in The US competing, winning. You've seen us. We have we we are disruptive. We have, we have taken share, we have gone from losing hundreds of thousands of subscribers per year to gaining hundreds of thousands of subscribers in a net port positive. We will operate, we continue to operate till a different if and when a different avenue is open for us or is demanded of us, we'll certainly head in that direction.

But we need to maximize the value that we have for our shareholders, be the player that people want us to be in the marketplace, serve the customers that we are increasingly serving. And I will not try to predict or predict what the market may end up being. You know, you referenced cable, you referenced others. No, I certainly don't control their business or their strategy and unable to comment on any of that. All I want to say is that we find ourselves in a very unique position.

We have been a good carrier. I think we have delivered on everything that we have been asked to do and committed as part of the formation of EchoStar, I guess at that time DISH Network and now EchoStar we'll march along. What we have done today has been in the works for a very long time. I won't comment on how the funding you talked about that. All of that I'll make more clear when we share with you a more holistic picture of our financial situation and our system when we get to hopefully the satellite show in Paris.

All I know is that we have a very positive step in front of us right now with this announcement we made today. Collaboratively with FCC to find an amicable solution that is in the best interest of everyone. We still have all the strategic options in front of us. We have not closed any doors with any angle or avenue that we could pursue, But, I remain constructive in my view that we'll find a solution going forward.

Given that you're not spending on the network, and likely pulling back on marketing expenses given the issue, maybe not. Is there any reasonable timeframe that you can provide in terms of when whatever resolution is reached with the FCC? Are we talking by end of year, by end of quarter? And like any type of ballpark kind of end date you can give us on this timeline?

Again, it's primarily not up to us. We have been constructively working with FCC to answer, provide responses to each one of their inquiries including detailed information that comes our way as request from FCC. Also in parallel we're working with a wide ranging number of alternatives to make sure we find a win win win, I guess I'd like to call it solution. Since we are not on all sides of that, I can't predict how this may go. But I want to say that we, from our side, we are not passive.

We're not sitting there and we are progressing with our discussions everywhere we can, but it all depends on other parties, and their and desires. I would think that this will not be years away. Is probably not very far away. I think the patience of FCC or request of FCC has been that we do something together in a reasonably shorter timeline, but I wouldn't necessarily tell you that I have a hard deadline or milestone in my mind about how we come to a closure. I know it's softer answer than you expect to get, but candidly, I don't control all aspects of it.

And all I can say that if there is a delay in finding a solution, it is not because of us. We we have every this is the highest priority for me and my team, and we're not taking it lightly.

The next questions are from the line of Brian Kraft with Deutsche Bank. Please proceed with your question.

Hi, good afternoon. I guess I had a follow-up question on the LEO constellation announcement. So I wanted to confirm, so the right interpretation of the press release language, and I appreciate that you don't want to share details when payments are being made. But is the $1,300,000,000 for the first 100 plus satellites roughly the amount that gets invested through 2028? Or is the $5,000,000,000 the number that gets invested by 2028 or shortly thereafter?

Just those are orders of magnitude different. So I'm just trying to get a sense for what that capital envelope actually needs to look like for you.

I had a follow-up after that, if that's okay. So sorry, go ahead.

$5,000,000,000 let's talk about $5,000,000,000 because that's the more umbrella headline. The $5,000,000,000 is the overall peak funding of the project and I have not specified at least in today's discussion as to when that peak funding will be reached. How many years down the road, the days or months down the road that may be. But the peak funding includes obviously your satellites, includes the cost of launching them, includes the cost of gateways, operations, everything else that you have to have in a typical business plan as you would put together. Now the peak funding at some point will be reached, who knows, I'm not as specified as I said today how many years down the road that will be, but once it reaches, so therefore we need to have by that time a total capital of 5,000,000,000 available to us and post that window, that peak, every day the system pays back that investment obviously as a typical private equity case, you ultimately end up paying that money back and you end up generating the additional value that the system delivers to you.

The 1,300,000,000.0 is the one piece of that five that we announced as a result of having made a commitment or agreement with MDA to manufacture the satellites. We have not talked about any of the other components yet of cost structure, which hopefully we will be more informative about and be able to give you more in Paris, which is only a few weeks away. Today, the most important piece is that we have embarked on that journey, which means the rest of the picture will also come into play as we are a 100% committed to being the best provider of direct to satellite connectivity in a wideband way. The second part of your question, if there's any, I'll be happy to follow through.

Yeah. So I guess I just wanted to understand too, what are the service capabilities that you expect to be able to offer, let's say in 2028? It sounds like that's when the service would launch. In terms of geographic coverage, I assume it would be a twenty four hour service. What kind of bandwidth?

And also, just high level, what do you think the revenue model looks like for D2D? Is it a revenue share model with carriers? Is it sell them low cost capacity on a per gig basis? Just curious how you're thinking about that.

Okay. So the service our vision of the service in it it is from even from day one will be to offer everything you have in your pocket today. So if you do text, voice, video, FaceTime, accessing your apps, and, you know, if you're in the middle of Grand Canyon or in the middle of the Atlantic Ocean and you just wanna watch Netflix, we want you to watch it. Whatever you do on your you can't tell the difference whether your cell your phone is connected to the nearest cell site, where is the nearest cell site? Is it 600 kilometers above you or two kilometers to your right?

That is the standard. Is the standard we have worked on and architecture we have tested and we put it in place and we manufacture it. No one else is doing that. I want to be very on the record. So when they say crowded the space, yes, other parts of the industry is crowded.

This one is one player and, you need the position to do it. Now, of course, on day one and the first version and then not the smallest number of satellites, which I call minimum viable offering to start, you don't have all of that capacity in a way that every person can do that. And we're not planning to do that. We're planning this not replacing where you already have great four other carriers covering your neighborhood. But as soon as you go out of it, there's hundreds of millions of people that are outside and there are travelers and the governments who want it differently.

Services, drones, unmanned vehicles, everybody else that needs to be connected that are not necessarily only reliant on terrestrial coverage will be able to serve this. But our product will be indistinguishable from what you already have on your iPhone or your Android phone. As time goes on, the system capacity goes higher. This becomes more affordable, more available to more people. So I can envision that just to be safe, let's put it twenty years down the road, you're gonna get to a point that anybody, anywhere they wanna watch Netflix, they can also watch it through the satellite.

They don't have to watch it through terrestrial. That's possible. So let's just leave that. Now, that's now that in terms of go to market model, as I said, we are not planning to compete with the carriers. We are producing this as a benefit to the carriers.

It'll be an additional source of revenue for the carriers. It'll be a service enhancement for the carriers. The carriers will be offered instead of 99% coverage or 82% coverage, a 100% coverage of globe, not just even where people, you know, their houses are, wherever they travel. So our model, we are not able to share the details of our model, but I think it'll be value enhancing for a carrier and us in a collaborative way. We do not wish to go direct to consumer.

We may be forced to do it or choose to do it in cases where there are no carriers in some geographies over the waters or other places where, you know, we may have the obligation to do it or some other way we want to do it. But that would be a, abnormal, very unusual corner case. We really like to go to the market with the carriers using their relationship with their customers, strengthening that relationship with their customers, making sure the regulators and local laws and everybody else is happy about, our offerings in the countries. So that is our path to market, very collaborative with governments, regulators, carriers, everyone. That's our model.

Our next question is from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question.

Thanks. Just sort of sticking on the topics of day, Hamid, you've suspended spending on the wireless on the five gs network. But are you going to be moving forward with your investments in this LEO project? I mean, I don't know if it starts immediately, but you've obviously signed a contract with MDA. It just seems a little confused as to why you'd be moving forward with one and not the other. Maybe I'm just thinking about the timing differently.

So I'll be happy to explain. That's a very good question. I would say that our direct to satellite, you know I've talked about it almost every earnings call and in fact going back to the merger of the two companies, a key decision factor, a criteria and benefit of bringing DISH and EchoStar together was to activate this opportunity. Had the spectrum on one side, we had the technology on the other side, there was two hands that we wanted to clap. We need to bring them together.

And we did that. So this is not an accident that we are doing this. This has nothing to do with honestly has nothing to do with any of the recent events. Now you have a very good question. The question is that if you have this network issue that you're saying, hey, I don't know until I resolve with FCC all my issues, I'm hesitant to invest in a network.

But why aren't you hesitant to invest in a space? I think that's the nature of your question. We can't alter the terrestrial, I can slow down to get more clarity and I don't lose a lot of market opportunity. I don't, because I have a national roaming. We already have a great, great coverage, two eighty million plus consumers are covered.

I have perfect experience with my consumers, lowest churn, highest ARPU, dissatisfied. I'm winning. I'm winning. I got more consumers, prepaid consumers than almost all of the other carriers this quarter. And so we went in there and I don't need to do anything until I have the certainty shows up.

As comes to space, I don't have that luxury to wait. The opportunity is here now And if I wait a few more months, my business model gets impacted negatively. Europe is in the process of, asking us and everybody else how we are going to get to space. I need to have a definitive answer in Europe. I wanted to have this American leadership and I don't want lose it in Europe.

I don't want to lose it in other places. If I wait to resolve this, that opportunity for US and Us is lost. And so we have decided to continue on the path we have been on the direct to satellite because we cannot wait. That is critical time path. The national network build, we are already in a phenomenal position.

We have over 24,000 sales sites. And so I don't see a few months delay till we have more clarity detrimentally change my business one way or the other.

Yeah, that makes sense. That's a helpful answer. Is there any reason why you are going to be able to share a lot more detail on this in Paris than on this call other than that's a more important audience than maybe this one?

Absolutely, the most important audience is the audience that leans to me no matter who it is. Kidney cancer studies that this is in development. We there are many more pieces that have to come together for this picture to be clear. For instance, the satellite is one piece. We still need to talk about all the other components.

EchoStar (SATS) Q2 2025 Earnings Call Transcript

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