EchoStar sets sights on direct-to-device market

Direct-to-device (D2D) is one of the areas EchoStar will pursue with vigor in the wake of a complex series of financial moves and the proposed sale of Dish’s pay-TV business. Those moves aim to extend a lifeline to EchoStar, giving the company years of runway as wireless becomes the cornerstone of the business.

EchoStar didn’t spell out precisely how it will pursue a D2D platform that enables smartphones to expand coverage by connecting to satellites.

President and CEO Hamid Akhavan views D2D as “one of the greatest, if not the single greatest opportunity, left in the space right now in terms of the impact on consumers and global relevance and also financial return.”

EchoStar is “very focused” on D2D, Akhavan said Monday on a call with reporters and analysts. “We have the spectrum rights and opportunity to make direct-to-device a global business.”

He acknowledged that D2D represents an expensive endeavor, noting that EchoStar will likely explore partnerships to build up such a strategy. He didn’t say who EchoStar will be working with, but peers such as AT&T, Verizon and T-Mobile have already picked some D2D dance partners such as SpaceX, AST SpaceMobile and Skylo.

“We do believe it’s better for us to work with partners, not necessarily because of the capital availability, which is very important, but also from a perspective that it’s a global offering and you’d like to have more participants in there in order to advance its chance of success and deployment,” Akhavan said. “In due time we’ll talk more about that … We think we’re uniquely positioned for it.”

It’s not clear when EchoStar will pull the trigger on its plan, but Akhavan said the company will try to make D2D a reality “as soon as possible.”

Transforming EchoStar into a ‘growth’ company

Akhavan spent a good portion of Monday’s call walking through a handful of transactions aimed at giving the company some much-needed financial runway amid a debt wall that threatened to push the company into bankruptcy.

Among those moves, EchoStar notched $2.5 billion in standalone financing that will help the company cover its financial obligations in 2024 and into 2025. Tied in is the proposed sale of the Dish pay-TV business (including both the Dish satellite TV and Sling TV businesses) for $1, plus the assumption of $9.87 billion in debt, to TPG. Additionally, EchoStar raised $5.1 billion in spectrum-backed financing.

Here’s a high-level view of those transactions:

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