Charlie Ergen’s network companies are now officially one entity again, with EchoStar having completed its merger with Dish Network.
The all-stock transaction was completed on December 31, via the mechanism of a wholly owned subsidiary of EchoStar merging with Dish Network. The Dish Network brand survives, however, and is operating as a wholly owned subsidiary of EchoStar.
EchoStar also continues to maintain its other brands for wireless terrestrial and satellite services, including Boost Mobile, Boost Infinite, Sling TV and Dish TV, as well as the EchoStar, Hughes and Jupiter satellite services, HughesON managed services and HughesNet satellite internet.
The combined company’s headquarters remains in Englewood, Colorado.
EchoStar said in a release that the merger means that it is “uniquely positioned to deliver a broad set of communication and content distribution capabilities, accelerating the delivery of satellite and wireless connectivity solutions desired by customers.”
“This merger brings us one step closer to our goal of offering ubiquitous connectivity to people, enterprises and things, everywhere,” said Hamid Akhavan, president and CEO of EchoStar. “Together we’re better positioned to realize the connected future by leveraging every type of transport, combined with smart, enabling technologies and fully integrated services. Our superior portfolio of technology, spectrum, engineering, manufacturing and network management expertise will deliver the unparalleled connectivity solutions that customers demand.”
Dish has been trimming down its employee base and operations in the months leading up to the merger, as a result of weak financial performance that at one point sent the stock to a 25-year low following weak Q3 earnings. Dish laid off employees and also sold spectrum and approximately 120,000 Boost Mobile prepaid customers in Puerto Rico and the U.S. Virgin Islands to Liberty Latin America for $256 million.
On the upside for the company, the Federal Communications Commission earlier this year affirmed that Dish is meeting its 5G network build-out commitments—if it had not, the company would have been in danger of losing some of its spectrum rights. Dish’s nationwide 5G commitments included that it would deploy a nationwide 5G network that had at least 15,000 sites deployed, with at least 30 megahertz of Dish’s download 5G spectrum averaged over all Dish 5G sites deployed nationwide, and that at least 70% of its covered POPs would have access to average download speeds of 35 Mbps or greater.
The merger with EchoStar potentially opens up more capital resources for the combined company. Some analysis has painted a bleak picture of Dish’s finances, noting that the company has significant amounts of debt, with $5 billion coming due in 2024 and 2025—and suggested that perhaps by combining the two companies, Echostar could provide more assets to borrow against. Dish said in its second quarter 2023 filing with the Securities and Exchange Commission that though it has repurchased tens of millions of dollars of its debt, it still has $995 million in convertible notes due in March 2024. “We do not currently have cash, marketable investment securities balances and/or projected future cash flows to fully fund our convertible notes due in 2024 with a remaining aggregate principal balance of $995 million, which mature on March 15, 2024,” Dish said.
At the time that the re-merging of EchoStar and Dish was announced, Ergen said: “This is a strategically and financially compelling combination that is all about growth and building a long-term sustainable business,” said Ergen, who was chairman of the board of both companies and remains executive chairman of the board of the combined company. “Dish’s substantial past investments in spectrum and its wireless buildout, combined with EchoStar’s recent launch of [its new satellite] Jupiter 3, are expected to significantly reduce near-term CapEx requirements. The transaction is expected to generate significant cost and revenue synergies, and the strong asset portfolio of the combined company paired with its enhanced free cash flow generation capability and strengthened capital structure are expected to drive long-term value creation for our shareholders and other stakeholders.”
“Bridging the digital divide and seamlessly connecting people, enterprises, and things is essential in the digital-first economy,” said John Swieringa, who is president, technology and COO of the newly combined EchoStar. “Our combined brands, technology and operational and engineering resources uniquely position EchoStar to provide a compelling global offering that connects consumers to the internet access, mobile phone service, television programming, and streaming content they want, as well as delivering business and government customers the secure terrestrial, non-terrestrial, and hybrid connectivity solutions they need.”
