Q4 2021 EchoStar Corp Earnings Call

Yes.

Yes.

Good afternoon, ladies and gentlemen, and welcome to the Echostar Corporation Conference call for fourth quarter 2021.

At this time all participants are in a listen only mode.

Later, we will conduct a question and answer session and instructions will follow at that time.

And when should recur any assistance during the conference you May Press Star Zero.

And as a reminder, this conference call is being recorded.

I'd now like to turn the conference over to your Speaker today, Mr. Terry Brown.

Thank you operator, and good afternoon, everybody and welcome to our earnings call for the fourth quarter of 2021, I'm joined today by Charlie <unk>, Our chairman Michael Dougan, our CEO , David Rayner, COO and CFO <unk> Kaul President of Hughes, All Anders Johnson Chief strategy.

Officer, and President of Echostar satellite services, and Dean Manson General Counsel and Secretary.

As usual, we invite media to participate in a listen only mode on the call and ask that you not identify participants or their firms in your report. We also do not allow audio recording which we ask that you respect let.

Let me now turn it over to Dean for the Safe Harbor disclosure.

Thanks Terry.

All statements we make during this call other than statements of historical facts constitute forward looking statements made pursuant to the safe Harbor provided by the private Securities Litigation Reform Act of 1095. 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.

<unk> 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-K filed today with the SEC.

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 I will now turn the call over to Mike Dugan.

Thank you Dean good morning, everyone actually good afternoon here.

Mountain time.

Welcome to our earnings call.

Costar team delivered another solid performance throughout 2021 with year over year growth in revenue net income and adjusted EBITDA.

Continue to supply the connectivity on which millions of consumers enterprises government agencies and communities depend on.

I am proud of the team's efforts and accomplishments and take pride in our ongoing innovation and industry leadership our.

Our agenda for the call today is to have pregnant and honors provide updates on our business segments, followed by Dave <unk>, who will discuss our financials in more detail from there we will turn the call over to Charlie to address the change in management that was announced on Tuesday, We will then close as usual with a question and answer session.

Bradman.

Thank you Mike.

I'd like to Echo Mike's comments, and say that I am extremely proud.

Team's performance and financial results.

<unk> 2000, <unk> revenue and adjusted EBITDA.

Highest on record 2021 revenue increased 8% and <unk>.

Adjusted EBITDA increased 9% over last year.

Adjusted EBITDA margin in 2021 was 44%.

150 basis points higher than 2000.

These strong financial results are driven by our innovative products and connectivity solutions and the efficient management of our business.

We continue to focus our efforts at optimizing financial returns, but investing in technology solutions to grow our business.

Now, let's turn to some specifics on the fourth quarter.

Beginning with North America.

We continue to manage our U S consumer broadband sales and marketing efforts.

Proactively to optimize our service to existing subs.

This is especially critical as we manage the business within our current capacity constraints.

Surprisingly U S subscriber base declined by approximately 30.

At the same time, our U S retailer pool remains strong.

Our subscribers bandwidth usage continue to grow we.

We expect the subscriber trends to continue in the near term as consumers use mobile data.

Which is why we have adjusted our consumer service plans in the U S.

Offer more data and better meet subscriber needs in.

In short demand for our service and these high as the large addressable market of Unserved and underserved households persist in the United States.

Our North American Enterprise group had a very strong fourth quarter.

$140 million in closed orders.

These include upgrades and extensions with several major customers.

You shouldn't have an exciting new brand.

Restaurant market.

The customer selected our full stack of solution from us representing a true business partnerships as we manage their networks to help them achieve their business goals.

Now that Youll find enterprise solution was reinforced once again.

Industry, leading placement.

Magic quadrant for global managed service providers.

The Frost <unk> Sullivan report.

Both our defense and civilian government teams very active in Q4 in the defense market with a major award with popular defense.

Provide a standalone site.

Net book added Navy base.

For this project the position as the prime contractor integrating technologies and services from numerous partners to deploy secured five G capabilities for base operations.

We also secured wins at both the federal and state markets.

Both new and expanded procurement contracts for multiple state agencies.

As part of our one Grad program, we saw the successful completion of a major milestone.

Appointment of eight gateways, enabling initial service launch.

Remember.

We're planning on a very active 'twenty two as we complete the gateways that enable one web to expand their coverage areas.

Now, let's talk about our international operations similar to the U S. Latin American consumer offering has become capacity constrained in certain markets.

And our subscriber base declined by approximately 18000.

We continued our efforts to realign capacity requirements on a per subscriber basis.

We anticipate will improve customer satisfaction and continued to drive higher <unk> across all countries.

In Q4, we crossed 1000 active sites in Colombia in support of our digital divide project and the deployment continues to grow.

In addition, we were awarded a number of projects in Peru, Colombia, Chile and Mexico.

Have also now profitable in 2000 active community Wifi sites.

We're making progress on our plan to increase the yield on our capacity through a mix of high value subscribers community Wifi and enterprise opportunities.

We completed the formation of a joint venture in India with 38.

Now operating it as a huge communications India Brad.

With unmatched reach and scale of the company the largest satellite service operator in India.

<unk>.

The changing regulatory environment to serve the converging connect connectivity.

Cloud base of business and government customers.

<unk> product portfolio and operational efficiencies.

We also announced a six year strategic agreement with one.

To provide Leo connectivity services across India.

Use India as we deliver the services to enterprise and government customers, providing network design equipment installation operations maintenance and.

We anticipate these new services to begin in 2023.

In terms of system sales, we had a number of new wins in Mexico. Two satellite service providers selected the Jupiter system to provide services to more than 3000 sites.

In Asia management clients ordered boosted 8000, tubular reboot modules to be integrated into the nose and operating on a single network.

In Indonesia, the total number of sites deployed in support of our government service program has now crossed more than 2000 cellular backhaul sites.

Yes.

<unk> continued to expand its network deployment with the connect satellite.

Finally, our Jupiter three satellite continues to progress based on updated information from Max.

We anticipate this satellite to launch in the fourth quarter of 2020 to SaaS.

The satellite with leverage the latest iterations to lower cost per bit and include increase our capacity of apartments with higher speed service plans we.

We continue to build out the ground infrastructure that will enable services on Jupiter three.

So all in all it was a very strong year and I look forward to another productive year in 2022.

Let me now hand, it over to Anders.

Thanks.

Good afternoon.

Star satellite services revenue for Q4 was $5 million up from the fourth quarter of last year, we remain.

Focused on pursuing Ku band revenue opportunities as the transponder capacity market continues its slow recovery.

<unk> backlog was $10 million 400000 as of 12, $31 21 up 55% from last year.

Our Echostar global SAP three satellite is now in Houston is a test platform for the development of our global S band capabilities.

In December 2021, our European subsidiary Echostar Mobile development partner see Quantum's, a leading provider of cellular Iot chips and modules announced that LTE band 65 support is now available on its cassiopeia LTE advanced platform.

The enablement of band 65, and <unk> chips and modules lays the foundation for <unk> commercial development efforts and multiple areas. During 2022 particular, particularly in the air to ground networks and in unmanned aerial systems.

NL continued live testing of Lora, LR FH Sss technology over Echostar 21 for multiple locations across Europe .

<unk> by our development partner <unk> email continues to see very encouraging results both in fixed and mobile testing.

In March <unk>, we will present at the Lora Alliance as World Expo in Paris at that event <unk> expects to formally announced the launch of an Alpha service to ml early adopting adopter partners across Europe .

We continue working on multiple fronts towards our long term strategic objective of taking <unk> to the next level through the full integration of S band satellite services into global <unk> networks.

<unk> truly seamless worldwide hybrid hybrid connectivity.

I'll now turn it over to Dave.

Thank you Anders as usual my narrative will include comments on adjusted EBITDA, which is reconciled to our GAAP measure in our press release Consol.

Consolidated revenue in the fourth quarter was $499 million up 9 million compared to the same period last year driven by our Hughes segment.

He used equipment revenue increased $19 million from higher sales activity to both domestic and international enterprise customers.

Service revenue decreased $10 million, primarily due to the lower U S consumer subscribers.

Consolidated adjusted EBITDA in the fourth quarter was $160 million a decrease of 4% from last year Hughes' adjusted EBITDA in Q4 was $178 million down by $10 million from the same period last year.

The decline in Hughes adjusted EBITDA was driven primarily by lower gross margin due to the change in revenue mix as well as higher selling general and administrative expenses.

Corporate and other adjusted EBITDA was a loss of $21 million this quarter compared to a loss of $24 million last year.

The primary driver of the lower loss was lower corporate spend primarily on legal expenses, partially offset by lower earnings of unconsolidated affiliates.

Net loss was $80 million in Q4, a decrease of $77 million from last year.

The decrease was primarily due to the impairment of our dish Mexico equity investment in the fourth quarter up $55 million losses on investments of $50 million in the quarter and unfavorable changes in foreign currency exchange rates.

These items were partially offset by lower net interest expense of $19 million.

Capital.

Penetration in the quarter were $86 million compared to $114 million in Q4 last year free cash flow defined as adjusted EBITDA minus Capex was $73 million during the quarter, increasing $20 million from the same period last year.

Inflation began to impact our operations in late 2021, as we have experienced increased costs in certain functional areas.

<unk> field services and customer care that are labor intensive work.

We are making every effort to minimize this impact to our operations and protect our margins.

In the fourth quarter 2021, we bought back one 2 million shares of our stock in the open market at a cost of $30 million.

Our balance sheet remains strong and we continue to seek opportunities to deploy cash for growth.

Let me now turn it over to Charlie and before we go to Q&A.

Thanks, David I just wanted to.

To join the call to thank Mike for.

His service.

And I started working together in 1990, so it's been all along.

Grow together.

Most people that probably don't realize just wasn't important part Mike.

Played in terms of.

Missions DBS business in <unk>.

Our our satellite fleet.

It was really the architect of our digital.

Set top boxes and engineering in.

Our satellite.

Nothing we did and of course, obviously has a long tenure at Echostar when we split the company off so.

A job well done Mike and thanks for.

We're all here.

Loyalty and effort.

Hi.

Where we're going but at the same token we're excited to have occupied.

<unk> starting with us.

It's a different set of skill sets and we've had here in the past. These certainly are technically competent.

Who individual.

Engineer, who will certainly understand.

Many of the things we do from an engineering perspective, but he brings he brings also experienced in the private equity business and each bank experienced in telco.

And we think those are all areas where.

Given our cash position and given our.

Satellite fleet, and where we think connectivity goes we think those are all things that can be very very helpful. With so.

With that thank you.

We take the questions, we're turning it over to questions operator, great. Thanks.

As a reminder, if you have any questions at this time. Please press Star then the number one on your Touchtone telephone.

And if your question has been answered or you wish to remove yourself from the queue. You May press the pound key.

And first question comes from the line of Ric Prentiss of Raymond James break Your line is now open.

Hey, good afternoon everybody.

Echo My congrats Mike on your career and.

Enjoy your upcoming retirement.

Thank you.

Couple of a couple of questions.

Probably target them to Charlie's since you've joined US today for the Echostar call too.

Charlie opportunities for me today.

The top question, we got yesterday was obviously the new CEO announcement.

Can you help us understand.

Changed with the Echostar story.

Amit coming in and what do you see as the top two or three priorities you want him to focus on and I'll go with what the tough questions.

Does that question for me.

Yes.

I think he I think he brings a different background.

I think what.

What we've been able to do over the years has put a lot of strategic things in place.

And we have a strong balance sheet that particularly for this industry.

There's lots of opportunity out there and.

Whether that be consolidation within the industry or whether that being new places to go so.

He brings his expertise as kind of a rare expertise that he's got both private equity experience and technical experience. So.

I think you said I think he's able to.

We will.

Focusing the company on the areas that we think when you would go I think there's just a broad perspective.

The areas, we have a tremendous opportunity.

If you look at it is we're a connectivity company.

We've done well with satellite, but theres tremendous opportunity terrestrial there's tremendous opportunity to tie and satellite with telco.

There remains where we've been.

We havent done what we needed to do in areas of growth such as department of defense.

Where there is.

We're not as big a player is most in our industry.

There.

We know from that.

<unk> private networks are going to become.

A big part of work companies.

Companies go and we have a lot of expertise and technical royalty there and.

And we have a new generation of satellites going up.

The first three that not only can bring connectivity to consumers and enterprises, but also.

From what I know about that.

Wireless business also provides the <unk> ability to do backhaul for telco. So all of those things kind of mesh together.

He brings great experience.

To that.

Bob.

And I think I think that will be.

Important for the people who are shareholders to get to know him and get to know it is very strategic.

Good.

Get to know him and add to this particular question to him will give we will give them the FERC.

We will give them 60 days, so I think for the March conference call you get a chance to ask them all of those things directly I actually will get 63, which is <unk>.

We have a role here that you can blame me for 30 days.

Anything that goes wrong, so mike's going to get blamed up until April 30.

And then nobody complained Mike for anything.

As Youll get blamed for everything for 30 days, but after that it's all of it.

Yes tough question.

We're dealing with today, obviously, the stock's down significantly.

The market's not getting what we think we see as opportunity you guys see the opportunity given the stock buybacks maybe.

Maybe just need to have an analyst day like conditions, but that seemed to really get the market excited today.

As you think about Echostar strategically Charlie you mentioned alluded to.

Calpine strategic sense.

The benefits to being public at this point given the large cash balance you guys have been buying back stock in the market doesn't see what I think I see I'm being told somebody days I must be stupid then.

What are the benefits to being public.

Well eventually being public just liquidity I mean, its liquidity and access to capital markets may be in a more robust way than you would think you would get.

Normally by being public.

Your stock was trading.

That's a better multiple.

You also have a currency that from.

From an M&A perspective, that's not the case obviously.

<unk>.

With Echostar.

Okay.

Echostar is not a situation that they can use stock for transition for M&A transaction transaction, all they have cash as they can.

So those.

Those are the benefits of being public obviously the company has bought back some stock.

When the board looks at the investments we can make.

The company has been willing to buy back stock.

Based on.

Just the values and the multiple that we see out there so.

I think internally, we are more confident than perhaps wall Street is.

Last one for me that has.

Come up a couple of times last quarter, I think Stephen by on the dish call borrowed up as well.

Do you view, how echostar and dish can work together.

And when can it become more obvious to the marketplace of what that might mean.

Well there is.

There's a lot of cross pollination.

In terms of in terms of opportunity so.

<unk>.

I think I think we will see more of that.

Again, I would say a couple of ways satellite I believe when you look at connectivity.

Youre not going to do that around the world without satellites.

And Echostar Hughes in particular are you have a real expertise in satellites, particularly geo satellites, but thats a big piece of where connectivity is going to go at the world's changed a little bit with Leo as EMEA, we have a pretty good understanding of that particularly as we as we have been strategic or an engineering partner for one web.

It is really the FERC wanted to massively so we gained a lot of expertise there. So there's a lot there than theirs.

Obviously dish is focused on the threshold side of the business.

And so when you put those two things together those two companies that know each other.

And the same hometown.

I have a lot of expertise to work together that doesn't mean that Echostar Hughes, one work with others and certainly doesn't mean the dish would work.

Exclusive exclusive with Echostar, but.

I'd say, it's a lot of times, we see opportunities.

At Echostar, and we realize that it might be beneficial or dish or vice versa.

So.

I just think I, just think you'll see opportunities for both companies going forward, maybe in a way that we haven't in the past.

Great I appreciate you being on today's call and help us understand thanks Charles.

Next question comes from the line of Chris Quilty of Quilty analytics, Chris Your line is now open.

Thanks, Ive got a with maybe a tough but I think important strategic question. So stick with me here.

Historically, the space industry has been Geo centric.

When we look at your strategy with the Jupiter series of satellites, you've gone down that path.

But only partway arguably your principal competitor Viasat didn't order one day. They are building three and there were already planning for Viasat four.

[music].

That's not me by the way.

And they're making a bid to acquire.

<unk> already design of ISS.

Excuse me, they're already developing a viasat four and making a bid to acquire another geo operator and inmarsat.

On the flip side many of the traditional operators have taken up a Leo strategy. So.

And towards that announced EMEA strategy.

Building, one and operate as one.

Telesat is building a leo and.

SaaS investing in one and then you've got other Leo broadband players Spacex and Amazon and now you've got one got a nice base. So my question is this you are one of the better capitalized companies worthy best capitalized company in the industry.

Yes.

You've run into this problem with time and again with your Jupiter strategy, where you run out of capacity way too early so my question is.

Is it going to happen again, we're going to have a good period here.

For a year or two where youre going to grow and then we're going to sit and wait for two years or.

Do you understand the landscape and offer have enough conviction that you can put some of that capital to use and pickup.

And which path.

Yes, I think Thats a great question.

And I'll give you a little color.

About the.

Person to person.

We have tried to acquire some companies and certainly when our stock perform better than having multiple we were able to do that and when we were.

We made offers for inmarsat in the past that actually exceeded where they actually end up selling and obviously they are.

Since there is a big stock component of where they actually sold at the prices come down a fair amount from what they saw.

It wasn't for lack of trying but we werent in situations. This particular time to bid for inmarsat because.

The equity.

The multiple so on our side that.

And Ah full cash offer wouldn't have approached that.

The price that they got the Leo.

So youre exactly right Jupiter go up you get some growth and then you will then you will mature and sharp.

Two or three years, you have to continue to build geos are or which have long lead times.

Are you have got to go slightly different direction. So that's really.

Great Thats, why we really had a unique candidate and Hamid because I think he crossed some of those bridges for us but on the legal side.

<unk>.

Given us pause.

Is.

There's so many leo projects.

That it's hard to it's hard to determine who might win win win there because I don't think all of them well that's number one second thing the economics for Leo.

Sure.

Water over 70% of the time so.

Youre going around the world, you're not necessarily getting economic gain.

70% of the time.

With your fleet.

And the third thing is.

It's unclear to me that the economics.

That starlink is such a big player there they have a different set of economics.

People value that company to.

A very high value they have owner economics on launches.

Yes.

And if you have to compete against that.

And something similar I am not sure that the Gordon area economics in the short run are very fair to somebody who has to compete against that particular constellation so you're going to have to let that kind of sorted.

Its way out and so I think there's other opportunities that.

It might be.

Equal equally or more rewarding, but certainly less risk.

I think that's where a bit more focus there. Although we are very very small on or in one web.

And we certainly understand technically we certainly work with them to.

Certainly work with them to make sure that we know we think the economics, there worked well absent a different set of economics for other players certainly Amazon with Amazon with launch capability and Star Languid wants capabilities may have a different set of economics.

And then what the normal marketplace.

Having said that Europe has indicated they're going to launch they may launch their own Leo system. So.

One never knows where it goes it seems like the risk return ratio there for us at the moment.

Were better off selling the fixed we're better off selling the picks and shovels.

To the players and maybe not being the gold digger.

I understand.

Specifically on the Geo market is there any reason to not.

At this point commit to.

Large high throughput satellite for the Indian market, given the fact that the regulatory environment has finally come into view or certainly close enough into view that.

Even if something went totally haywire with a software defined satellite it can go someplace else.

Or are there other factors that lead you to think you still need to wait longer to commit to that market.

Yes Christmas present.

We're looking at that very closely right now.

<unk>.

We see the need.

Need for it.

Capacity capacity.

Limiting factor on our growth right now.

So we're looking at different ways to get capacity in all of what you and Charlie was just discussing.

Base to do that.

I think the optimum configuration that we believe is.

Going to win out in that business as a combined <unk>.

Sure.

Our strategy because as you know.

Those are very good for high density Covenant.

Very dense.

Population Ngls.

As we get the lowest cost with the Geos that but then to provide coverage to advise.

The dealers are very important and.

I think youll see from my perspective over the next five years systems.

<unk> systems are being deployed with Leo and Geo architecture, but should optimize the problem of efficiency in the leos and density into Geos.

So when you look at that.

Do we have them.

Do we have the money to do that so it obviously is yes do we have the partnerships all over the world that would be needed like in India. The answer is yes.

I don't think compared to any other company today in that business.

There's nobody better situated to.

Employ these kind of multiyear multiyear.

Multi orbit multi transports.

Constellation, So I think Thats fair.

Good.

And we are hopeful.

We can use that existing partnerships to do it or we can open some of the assets that are needed to alternate in this area.

Got you and maybe a follow on question to the earlier one I had on what follows Jupiter three.

And a quick question on technology.

Have you sort of been able to define the path that you go there is it just a bigger batter version of <unk>.

Jupiter three that that's.

The future is it moving towards different frequency bands like V band <unk> band.

Sure.

Are you a fan of some of the optical technology.

Now gaining traction primarily on optical cross links but.

Is there a clear path at this point or do you think you need to wait until you can launch operate test.

You can see the performance of Jupiter, three before making some sort of a technical commitment.

Yes, I don't I don't think Chris.

It's a technology issue in terms of inventing something new I think Jupiter three has been tremendous.

Advances in technology I think my personal opinion is that the next step is going to be the multi transport technologies.

Jones and deals to get the most efficiency all five networks.

And.

So.

We could do we could take the Jupiter three technology and ticket to the next step and get.

The <unk> technology.

But that by itself is probably not so most optimum use.

Further assets.

So we have to create these partnerships, where we can combine deals in juices in the new types of consternation at the next set of investments we make.

I understand.

Shifting gears over to Anders.

It sounds like Youre getting closer to locking in sort of a technical design on your side can you give us a little bit better sense.

Where you see the market opportunity and perhaps relative to some of your peer competitors.

On the space and <unk> that are also operating somewhat adjacent models.

Yes, well, Chris we continue to pursue sort of parallel development path. So we've got a couple of things running simultaneously, obviously our effort with Lora.

Appears technically to be proving quite valid as far as our original hypothesis and we're very excited about where that's going.

We're also working independently with a couple of other spa.

Specific application.

Not as universally adaptable, but.

Hold a lot of market promise, because while the markets, we'd be participating and don't exist yet.

There's a lot of money chasing their development and one specifically, which I mentioned is the unmanned aerial vehicle market.

<unk>.

For package delivery and other purposes, which we're getting in early with certain development partners, who are in the process of creating the whole ecosystem. So we're trying to position S band as one of the co two frequencies given its.

Lack of existing uses and therefore, our ability to deliver a secure communications channel without a lot of interference issues.

Great and so I don't know who to direct this final question to you, but I guess here I have just targeted for you guys spending a lot of money on a lot of different stuff.

Or at least those are some of the opportunities in front of you and.

Who is going to make those decisions whether to invest in a.

The small sat S band constellation versus Big Iron high throughput satellites for M&A I mean, how do you balance these out.

In terms of capital deployment.

Versus ricks idea of just taking the dam company private.

Okay.

Yes. This is Dave I'll try and answer that Chris I think the decision is obviously, yes.

Starts with management and goes up through the board the deployment of serious capital I don't think right now we're limited.

To the cash on the balance sheet. We've obviously got as you guys well know we are virtually debt free at this point at a net basis. So we've got the ability to lever the company if we see multiple opportunities.

But it's up to management.

To recommend direction to the board and the board has been very supportive.

Date, and I don't expect that to change.

With the new CEO .

Welcome on Board Arvind and.

Maybe not a fortuitous.

To jump onboard unless youre pricing.

Pricing your stock options day, I guess so.

Looking forward I mean just to.

Just to be clear he's not with us today and his start date is March 31.

Okay got it.

Alright, thanks, guys.

Next question comes from the line of Michael Rollins.

Michael Your line is now open.

Thanks, and good afternoon I was curious.

On the topic of <unk>.

Broadband infrastructure items.

<unk> are becoming available at the state level I'm curious if you could discuss the opportunity.

Echostar to potentially participate and apply for some of those funds and curious if you could share your.

<unk> is the opportunity for Echostar.

Well, obviously, it's a nice opportunity.

And there is something we have.

Focused on trying to get a b cells.

Unfortunately.

Thank you.

The methodology.

Methodology of distributing defines has favored significantly the terrestrial alternatives.

Sure.

Satellites have not been.

A major.

Major benefactor benefactor of this.

These funds.

The guys in book to Todd and maybe the guidance spending unemployment.

The government to make the play.

Plainfield logistic bond level.

We get an opportunity to bid a comparison of EBITDA being just quantify just because of latency.

Speeds et cetera.

Again. This is an example of the new solution can also competitive.

A solution because.

So not an agency the ninos, obviously provide that in Dallas for high speeds and she knows that 100, megabit close et cetera.

I'll offer that capability and we're hoping that as the new.

Programs get funded and defined and we will be able to get a piece of our <unk>.

Also subsidies.

And do you have some experiences that youre able to share where you've had a good.

Participation rate of subscribers, the particular geography with your satellite services.

And our fiber or terrestrial alternatives has come into that market do you find that your services are still generally sticky said a subset of customers that <unk> been targeting or do you find that there is some.

The negative factor falloff from competition.

In the cases, where that might have happened.

Yeah.

Yes, the answer is yes, because it depends on the geography and the density of subscribers.

And in a certain area if you look at.

The satellites work its works very well in the Unserved and underserved areas. So that he is generally at unsub.

Because it doesn't make economic sense to deploy.

Five.

Other technologies at that time and satellites.

Correct.

In meeting that need.

So that's where we have deployed.

We haven't lost any substitute competing technologies. So when you look at our churn and factors.

But customers have churned out whether that's jumped out it's not dominated by people going to different technologies, it's a whole bunch of other reasons.

Most of the subs that we get we have a good sticky.

Stickiness.

Than that.

And I don't expect that to change dramatically over the next few years.

Thanks.

Next question comes from the line of Ric Prentiss of Raymond James break Your line is now open.

Yes, I appreciate some follow up.

One mundane one in the <unk>.

Fourth quarter, Dave you called out that it.

It was higher SG&A in the quarter can you help us understand what the.

That was and is that something we should consider run rating that's the new back to normal level or was there something out of period that we should be aware of and I've got a strategic one.

No I think the run rate will be a little bit better than what we had in the fourth quarter in that regards we had some.

Higher than normal cost in certain line items.

Because of some unique circumstances.

So.

Would expect SG&A to.

Be a little bit better.

Our lease over the next couple of quarters as we get closer to.

The Jupiter three launch and the initiation of new services I would expect to see some selling and marketing costs start ramping up that would be later in the year, obviously as we approach the launch just getting ready for that new capacity coming online.

Okay.

Obviously, a lot of frustration in the marketplace today as investors are trying to figure out as Chris kind of.

Jumped on there I'm trying to understand what is the strategy, what's the what's the game what's the plan.

Charlie I thought you said it really well today when you say well we had a bank shot on auction one time, we've got our strategy in place it's actually been respectful in place that I think people and we're going to have an analyst day at May 10, I think people look at Echostar. We were trying to say when can we start getting a view from the outside of what Echostar is doing.

What's the time frame is it three months six months three years when can we have that kind of more clarity on the decision process.

And also from a another level.

Don't like giving guidance, but we've had a lot of companies start giving guidance Viasat gave some guidance aspirational targeted here's what we want to grow revenues and able to add over a multiyear period eighty-nine.

The Massachusetts gave guidance for the first time really ever digital bridge, we're getting a lot of guidance to help investors understand what can be somewhat complicated story. So at least understand from a high level what investors should expect so I know a lot wrapped into that question, but I'd love your thoughts.

Yes. This is Charlie.

My perspective, a couple of things one is.

Just so you know the board of directors has been asked in those exact same questions to the management.

<unk> taken a very active approach there.

Because they are all good questions and management has basically based on the fact that I am involved.

Liquids company, and probably a little bit more than average Bard remember theres a lot of pieces there.

That between PRASM and hunters that.

That we have there I think the differences.

I think the first step was really.

Sure.

As Mike.

Retiring to bring in somebody who brings a skill set that debt.

That can kind of bring all those things together. So you have to you have to have a good technical background, but you also have absolute business background. He brings those things so.

There is not any question that the board has directed him and his first 30 days.

Besides getting to know the people is to review all of the strategic initiatives that we have.

And then I would expect that he probably will focus on one or two of them.

And then convince the board that that's where we need to go and Thats, where it will go.

I see I personally see three or four things are the highlights.

But I'm not.

Yes.

Yes.

My Board member as opposed to data management.

You have to dig into those things and you have to really play those things out so.

And again again.

The thing that the biggest question Mark I have is what are the economics for a spacex.

Or the marketplace.

Values that in a different way economically than maybe a traditional.

Finance Guy like me would do it.

And what you don't want to do is go compete against the richest guy in the World. It's got a different set of economics, even though you have better technology.

You would lose that every time so.

Hi.

I see a lot of.

Interesting things out there but.

Personally think that some people are going in the wrong direction.

And we just want to make sure that we were.

We think that through.

When in doubt there is no doubt, which as you can.

Didn't commit.

Or something that.

Let's cut those kind of risks.

I think I think we're doing the right things at the company I think we've got good leadership coming in and I think we have lots of strategic things, we can do and I think that.

Youll see over the next.

You're probably starting to get a little feel the next quarter, because I think youll see youll see something but probably realistically is that the end of the second quarter before you see this company.

To rollout a better vision articulated a vision of where theyre going to go and I think a lot of the things that I worry about in the marketplace are going to kind of start to start their way out.

By that as well so.

Somewhere between the May conference call in the August Conference call.

Are those two you could probably get pretty good probably August you're probably getting pretty good field.

Frankly, the fed.

Yes.

Because it's a perfect question to ask I mean, it's exactly the same thing any shareholders UBS.

Okay I appreciate your time today Charlie.

Thanks, Rick.

Yes.

Okay.

Yes, yeah, operator, so we'll probably just do quick final comment here and then.

At a conference soon.

You're running out of time I just wanted to thank you all for your support over the years.

Alright.

Charlie's comments, we have worked together longer than <unk>.

Longer than I've been married so.

It's been a long time so.

Learned a lot.

I'm committed to have Matt just to be clear I was part of the interview process.

<unk>.

Yes, Barry.

Excited too.

See him come on board I'm going to remain on the board.

<unk> matter and the board.

And myself.

Available as he needs me to get them up to speed. So.

<unk>.

I'm excited about what's coming and let's see how it goes.

Thank you Brian Thanks for joining.

Thank you so much to our presenters and to everyone that participated this concludes today's conference call. You may now disconnect have a great day.

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