Q4 2023 EchoStar Corp Earnings Call

Operator: Greetings and welcome to the EchoStar Corporation fourth quarter and year-end 2023 earnings conference call. At this time, all participants are in a listen-only mode.

Greetings and welcome to the Echostar Corporation fourth quarter and year end 2023 earnings conference call.

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

Operator: A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dean Manson, Chief Legal Officer. Thank you, Mr. Manson. You may begin.

Brief question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Dean Manson Chief Legal officer. Thank you. Mr. Manson you may begin.

Dean A. Manson: Thank you and welcome everyone to EchoStar's fourth quarter and full year 2023 earnings call. We will begin with opening remarks from Hamid Akhavan, President and CEO, followed by Paul Orban, EVP and Principal Financial Officer. Gary Shandman, EVP and Group President of Video Services; John Swearingen, President of Technology and COO, and Paul Gaske, COO of Hughes. Also present with us is Tom Cullen, EBP Corporate Developer. As usual, we request that any participant producing a report not identify other participants or their firms in such a report.

Dean A. Manson: Thank you and welcome everyone to Echostar <unk> fourth quarter and full year 2023 earnings call.

Dean A. Manson: We will begin with opening remarks from Hamid Octopod, President and CEO, followed by Paul Orban, EVP and principal financial Officer.

Dean A. Manson: And Gary Shannon EVP and group President of video services, John Swearing got President of Technology, and C O L and Paul Gaskey C O Olive Hughes.

Dean A. Manson: Present with us as Tom Cullen EVP corporate development.

Dean A. Manson: As usual, we request that any participant producing a report not identify other participants or their firms in such reports.

Dean A. Manson: 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 Security 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 statement. For a list of those factors and risks, please refer to our annual report on Form 10-K for the year ended December 31, 2023, filed on February 29, and our subsequent filings. 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.

Dean A. Manson: We also do not allow audio recording which we ask that you respect.

Dean A. Manson: 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 Security Litigation Reform Act of 1995.

Dean A. Manson: 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.

Dean A. Manson: For a list of those factors and risks please refer to our annual report on Form 10-K for the year ended December 31, 2023 filed on February 29th.

Dean A. Manson: And our subsequent filings made with the SEC.

Dean A. Manson: All cautionary statements, we make during the call should be understood as being applicable to any forward looking statements. We make wherever they up here 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.

Dean A. Manson: We will refer to OIBDA during this call. The comparable gap measure, and a reconciliation thereto, are presented in our earnings report. With that, I'll turn it over to Hamid. Thank you, Dean. Good morning, everyone.

Dean A. Manson: We've referred to OIBDA during this call the comparable GAAP measure and a reconciliation there too is presented in our earnings release with that I'll turn it over to Hamid.

Hamid Akhavan: Thank you Dean.

Hamid: Good morning, everyone. This is my first earnings call as the CEO of the new Echostar.

Hamid Akhavan: This is my first earnings call as the CEO of the new EchoStar. You may notice that we are using a format that we have been using at EchoStar, which is different from the traditional dish format. I find it more in my style of providing helpful, descriptive information up front, which attempts to answer some of the questions you may have.

Hamid: You may notice that youre using a format that we have been using that echostar, which is different from the traditional dish format.

Hamid: I find it more to my style of providing helpful. The scripted information upfront, which attempts to answer some other questions you may have.

Hamid Akhavan: The merger was an important milestone in both companies' shared history. It brings us closer to our goal of providing ubiquitous connectivity to people, enterprises, and things everywhere. It will enable business opportunities that we intend to realize in cost and revenue synergies as we continue to position EchoStar in the market with a superior portfolio of brands, technology, and services. This merger combined DISH Network satellite technology, streaming services, engineering expertise, retail wireless business, and nationwide 5G network with EchoStar's premier satellite communication solutions, enterprise go-to-market capabilities, and U.S.-based manufacturing.

Hamid: The merger was an important milestone in both companies shirts history. It brings us closer to our goal of providing ubiquitous connectivity to people enterprises and things everywhere.

Hamid: Enable business opportunities that we intend to realize in cost and revenue synergies as we continue to position echo starting to market with a superior portfolio of brands technology and services.

Hamid: This merger combined dish network satellite technology streaming services engineering expertise retail wireless business a nationwide <unk> network with Echostar is premier satellite communication solutions enterprise go to market capabilities and U S based manufacturing.

Hamid Akhavan: Collectively, it creates a new kind of athlete in global telecom and for EchoStar to be a leader in terrestrial and non-terrestrial wireless connectivity and entertainment services, exceeding any other company. When we merged EchoStar and DISH, both companies were at a crossroads as each was transitioning from building capabilities to commercializing them. At DISH, we built the world's first standalone 5G open RAN cloud native wireless network. At EchoStar, we launched the largest ever commercial broadband satellite.

Hamid: Collectively creates a new kind of athletes and global telecom.

Hamid: And for Echostar to be a leader in terrestrial and non terrestrial wireless connectivity and entertainment services exceeding any other company.

Hamid: Let me American Echostar and dish split companies. We're at a crossroads is each was transitioning from building capabilities to commercializing them.

Hamid: At dish, we built the world's first as Standalone five G open ran cloud native wireless network.

Hamid: Echostar, we launched the largest ever commercial broadband satellite.

Hamid Akhavan: Over the past 90 days, we have sharpened our focus on taking our newly combined capabilities to market and Leveraging Synergies across our diverse portfolio of products. Work is well under way to improve our capital structure, reset our retail wireless business, and grow customer traffic on our network, taking full advantage of our unique combination of assets. For now, I would first comment on our efforts to improve our capital structure. Let me begin by stating that we have a value-generating business with a strong potential for growth. We have an asset-rich balance sheet with significant capacity to support additional debt.

Hamid: Over the past 90 days.

Hamid: Sharpened our focus on taking our newly combined capabilities to market and leveraging synergies across our diverse portfolio of products.

Hamid: Work is well underway to improve our capital structure.

Hamid: He said, our retail wireless business and grow customer traffic on our network.

Hamid: <unk> taken full advantage of our unique combination of assets.

Hamid: For now I would like to first comment on our efforts to improve our capital structure.

Hamid: Let me begin by stating that we have in value generating business with a strong potential for growth.

Hamid: You have an asset risk balance sheet with significant capacity to support additional debt.

Hamid Akhavan: That said, in the short term, we need to provide additional liquidity to fund the growth of our business and address near-term debt maturity. To this end, we have enacted an operating plan for 2024 with the goal of achieving positive operating free cash flow, defined as free cash flow minus debt service payment. This includes a reduction in our annual total operating expenses by $1 billion between synergies and other cost measures.

Hamid: That said in the short term, we need to provide additional liquidity to fund the growth of our business and address near term debt maturities.

Hamid: Does this and you have enacted on operating plan for 2024 with a goal to achieving <unk>.

Hamid: Positive operating free cash flow defined as free cash flow minus debt service payments.

Hamid: It includes a reduction in our annual total operating expenses by $1 billion between synergies and other cost measures.

Hamid Akhavan: As part of our work towards an improved capitalist structure including a longer maturity runway and an opportunity to de-leverage our balance sheet, the strategic asset transactions we conducted in January enhanced our flexibility to implement various balance sheet initiatives, including opportunities to raise new finance. Following those transactions, we launched two exchange offers designed to address our near-term debt obligations and to reduce our overall debt. The exchange offers we launched were not accepted by our existing investors.

As part of our work towards an improved capital structure, including the longer maturity runway and opportunity to deleverage our balance sheet is strategic asset transactions. We conducted in January enhance our flexibility to implement various balance sheet initiatives, including opportunities to raise.

Hamid: New financing.

Hamid: Following those transactions, we launched two exchange offers designed to address our near term debt obligations and to reduce our overall debt.

Hamid: Exchange offers we launched were not accepted by our existing investors while discussions with some stake holders are ongoing we are prepared to continue a good faith discussions with all of our stakeholders and arrive at solutions that are in the best interest of the company and all involved parties.

Hamid Akhavan: While discussions with some stakeholders are ongoing, we are prepared to continue good faith discussions with all of our stakeholders and arrive at solutions that are in the best interest of the company and all involved parties. With this as a background, let us now address the growing concern qualification noted in our 10-K, which I'll have Paul Orban cover in addition to several key financial metrics and one-time items. Thank you, Hamid.

Hamid: With this as background, let us know address the going concern qualification noted in our 10-K, which I'll have Paul Orban cover in addition to several key financial metrics and one time items Paul.

Paul Orban: Thank you Amit.

Paul Orban: As Hamid mentioned, I'll start by addressing the Going Concern qualification. Please read the financial statements contained in our 10-K to see the precise disclosure. This evaluation is a technical accounting determination that, importantly, does not consider the potential mitigating effect of a range of operating and financing plans we're currently pursuing. For more color, the accounting rules require us to consider our current cash position and project our cash position one year from our filing, and do not allow us to consider any new funding sources unless that financing is committed at the point of our filing.

Paul Orban: Hamid mentioned I'll start with addressing the going concern qualification.

Paul Orban: Please read the financial statements contained in our 10-K to see the precise disclosure.

Paul Orban: This is a value evaluation as a technical accounting determination that importantly did not consider the potential mitigating effect of our range of operating and financing plans. We're currently pursuing.

Paul Orban: To provide more color the accounting rules require us to consider our current cash position and projected cash position one year from our family and do not allow us to consider any new funding sources unless that financing is committed at the point of our filing.

Paul Orban: We are in active discussions with numerous parties to secure committed financing to meet our future obligations, and we have received significant inbound interest from reputable counterparties looking to provide such financing in various forms and at various positions in our capital structure, all of which we are carefully evaluating. If sufficient financing is committed, the going concern qualification will be alleviated.

Paul Orban: We are in active discussions with numerous parties to secure committed financing to meet our future obligations.

Paul Orban: And have received significant inbound interest from reputable counterparties looking to provide such financing in various forms and at various positions in our capital structure.

Paul Orban: All of which we are carefully evaluating.

Paul Orban: We have sufficient financing has committed the going concern qualification will be alleviated.

Paul Orban: As of the end of the year, we had $2.4 billion in cash and marketable services. We intend to pay our March 15th debt maturity with cash on hand. However, financing will be required to pay off our November 24th $2 billion debt maturity.

Paul Orban: As at the end of the year, we had $2 $4 billion in cash and marketable securities.

We intend to pay our March 15th that maturity with cash on hand.

Paul Orban: Financing will be required to pay off our November 24, 2 billion dollar debt maturity.

Paul Orban: We believe we have significant new financing capacity using the unencumbered assets that include our spectrum holdings, as well as through the newly formed Unrestricted Sub, holding approximately 3 million DISH TV subscribers. As we evaluate all of our options, we are focused on operational flexibility and long-term financial. With the ramp-down of network CapEx, coupled with the reductions that Hamid discussed, we're expecting operating free cash flow to finance free cash flow, excluding debt service payments, to be positive in 2020. As Hamid mentioned, this is our first call since finalizing the merger. It is also the first time we are reporting as a consolidated company, with that. Our financial statements are presented for all periods as if we have always been consolidating.

Paul Orban: We believe we have significant new financing capacity using the unencumbered assets that include our spectrum holdings as well as through the newly formed unrestricted sub.

Paul Orban: Holding approximately $3 billion dish TV subscribers.

Paul Orban: As we evaluate all the options we are focused on operational flexibility.

Paul Orban: Long term financial stability.

Paul Orban: With the ramped out of network Capex, coupled with the reductions that can be discussed we're expecting operating free cash flow defined as free cash flow, excluding debt service payments to be positive in 2024.

Paul Orban: As Hamid mentioned this is our first call since finalizing the merger. It is also the first time, we're reporting as a consolidated company with that our financial statements are presented for all periods as if.

We have always been consolidated.

Paul Orban: You will see the legacy EchoStar business recorded under the broadband and satellite services segment, and the legacy DISH Network business presented in the Pay TV, Retail Wireless, and 5G deployment. Now, let's review our financial performance. First, we recorded two significant one-time non-cash items in the fourth quarter of 2023. The first non-cash item was the impairment of goodwill in the amount of $758 million in total. The accounting rules require a company to test goodwill at least annually, which we did in the fourth quarter. In our assessment, as a result of our market cap being suppressed for a prolonged period of time, we impaired goodwill in varying amounts across all of our segments. The non-cash impairment charge is recorded in impairment of long-lived assets and goodwill on our income statement and is a reduction in operating income and OEBD.

You will see the legacy Echostar business recorded under our broadband and satellite services segment and.

Paul Orban: In our legacy dish network business presented in the pay TV retail wireless and fiber deployment segments.

Paul Orban: Now, let's review our financial performance.

Paul Orban: First we recorded two significant onetime noncash items in the fourth quarter of 2023.

First noncash item is the impairment of goodwill in the amount of $758 million in total.

Paul Orban: The accounting rules require a company to test goodwill at least annually, which would get into fourth quarter.

Paul Orban: And our assessment as a result of our market cap based suppressed for a prolonged period of time, we impaired goodwill and various varying amounts across all of our segments.

Paul Orban: The noncash impairment charge is recorded an impairment of long lived assets and goodwill.

On our income statement and as a reduction to operating income and OIBDA.

Paul Orban: The second non-cash impairment was a $1.6 billion reduction to the fair value of our 800 MHz purchase option due to the relatively short time period remaining prior to the option expiration, coupled with not having a definitive financing agreement in place. We have reduced the value of the purchase option to zero, resulting in a non-cash charge of $1.6 billion to other income. Other income does not affect operating income or OEBD, but it does impact total net income.

Paul Orban: The second non cash impairment was a $1 $6 billion reduction to the fair value of our 800 megahertz purchase option.

Paul Orban: Due to the relatively short time period remaining prior to the options exploration, coupled with not having a definitive financing agreement in place.

Paul Orban: We have reduced the value of the purchase option to zero.

Paul Orban: Resulting in a noncash charge of $1 6 billion into other income.

Paul Orban: Other income does not affect operating income or OIBDA, but that does impact total net income.

Paul Orban: Next, consolidated revenue for 2023 was $17 billion; that's down roughly 9% year-over-year, due primarily to subscriber declines, mainly in paychecks. Removing the non-cash, goodwill impairment, operating expenses before depreciation were $14.9 billion.

Next it's.

Paul Orban: Consolidated revenue for 2023 was 17 billion, that's down roughly 9% year over year.

Paul Orban: Due primarily to subscriber declines mainly in pay TV.

Paul Orban: The movie the noncash goodwill impairment operating expenses before depreciation were $14 $9 billion, that's roughly 2% lower year over year.

Paul Orban: That's roughly 2% lower year over year. Operating expenses improved as we have fewer subscribers primarily on paid TV. The improvements were offset by continuing increases in programming costs and paid TV, as well as higher operating costs for our standalone 5G Open RAN network as we brought more sites in. OIBD was $2.1 billion excluding the impact of the non-cash goodwill impairment.

Operating expenses improved as we have fewer subscribers primarily in pay TV.

Paul Orban: The improvements were offset by continued increases in programming costs and pay television as well as higher operating costs for our Standalone Bacci Open ran network as we brought more sites into service.

Paul Orban: Well I bet that was $2 $1 billion, excluding the impact of the noncash goodwill impairment, that's down 1.3 billion year over year fueled by the ramp up in operating expenses for the network as well as reductions in subscribers both mentioned previously.

Paul Orban: That's down $1.3 billion year over year, fueled by the ramp up in operating expenses for the network as well as reductions in subscribers, both mentioned previously. CAFX was roughly flat year over year as construction activity for the network was similar in 23 versus 22. However, the capex band for the wireless buildout decreased in the fourth quarter and should continue to decrease in 2024. You can expect CapEx for network deployment in 2024 to be less than half of what we recorded in 2020. Pre-cash flow was a negative $1.8 billion for 2023, down $1.4 billion from 2022, similar to Orbita.

Paul Orban: Capex was roughly flat year over year as construction activity for the network with similar twenty-three versus 'twenty two.

Paul Orban: However, the capex spend for the wireless build out decreased in the fourth quarter and should continue to decrease in 2024.

Paul Orban: You can expect Capex for network deployment in 'twenty 'twenty four to be less than half of what we reported in 2023.

Free cash flow was a negative $1 8 billion for 'twenty three a $1 4 billion from 2022 similar to OIBDA.

Gary Shandman: The decrease is driven by an expanded network, OpEx, and a Reduction in Subscribers. 23 operating free cash flow with a negative $390 million. With that, I'll turn it over to Gary to discuss our paid TV unit. Thank you, Paul. On the pay TV side, we finished the year with approximately 8.5 million customers. In regards to DISH TV, our DBS satellite TV service, we finished the year with approximately 6.5 million subscribers, a loss of approximately 945,000 from 2020. Year-over-year, ARPA grew 3.3%, primarily from price increases across both DISH and Sling, and on a full year per subscriber basis, PayTV drove an OIBDA increase of 3% over 2020. However, our 2023 subscriber numbers for Dish TV were negatively impacted by a series of local broadcaster group changes, and also due to our Q1 cyber incident. We will always look to protect our largely rural customer base against unreasonable ratings.

Paul Orban: Decrease was driven by expanded network opex and a reduction in subscribers.

Paul Orban: For twenty-three operating free cash flow was a negative $390 million.

Paul Orban: With that I'll turn it to Gary to discuss our pay TV unit.

Gary Shannon: Thank you Paul on the pay TV side, we finished the year with approximately $8 5 million customers in regards to just E. D. R. E. D. S satellite TV service, we finished the year with approximately $6 5 million subscribers a loss of approximately 945000 from 2022 year over year ARPA grew three 3%.

Primarily from price increases across both dish and sling and on a full year per subscriber basis pay TV drove an OIBDA increase of 3% over 2022.

Gary Shannon: Our 2023 subscriber numbers for dish TV were negatively impacted by a series of local broadcaster group disputes and also due to our Q1 cyber incident.

Gary Shannon: We will always love to protect our largely rural customer base again from a reasonable rate increases.

Gary Shandman: Unfortunately, we've resolved most of these programmer disputes and look forward to a less disruptive year in 2020. In 2023, we sought opportunities to increase the yield on our video subscriber base while also seeking both investment and team efficiency. First, we consolidated The Dish and Sling Organizations into one video services team, driving significant efficiencies across product, marketing, sales, and operations.

Gary Shannon: Unfortunately, we've resolved most of these program or disputes and look forward to with less disruptive to your 2024.

Gary Shannon: In 2023, we sought opportunities to increase the yield on our video subscriber base, while also seeking both investment and team efficiencies.

Gary Shannon: We consolidated the dish sling organizations into one video services team driving significant efficiencies across product marketing sales and operations.

Gary Shandman: We also increased the focus on customer experience, better addressed customer pain points, and improved the product. In addition, we shifted investment to profitable growth areas across the business, specifically in enterprise video, media sales, marketing analytics, and loyalty efforts. We'll continue these initiatives into 2024, as well as integrating with and cross-selling our Hughes and Boost products. On the Sling TV side, we finished the year with approximately 2.1 million subscribers, down approximately 280,000 from last year.

Gary Shannon: We also increased the focus on customer experience better address customer pain points and improved our products.

Gary Shannon: In addition, we shifted investment to profitable growth areas across the business specifically in enterprise video media sales marketing analytics and loyalty efforts well.

Gary Shannon: We will continue these initiatives into 2024, as well as integrating with and cross selling our shoes and boost products.

Gary Shannon: On the sling TV side, we finished the year with approximately $2 1 million subscribers down approximately 280000 from 2022.

Gary Shandman: It is important to note that Sling is, and has been, a profitable business, which is rare among streaming services. However, our Q4 results were impacted by an increasingly competitive streaming market. Programmers continue to spend less on their core linear TV product, which we pay for, and continue to shift investments into their own direct-to-consumer services, even though these efforts have been largely unprofitable. In particular, the Warner Bros. Discovery's decision to make TNT and TBS sports available free through Macs and the increasing simulcasting and sports programming on ESPN Plus from Disney and Peacock from NBCU have added more confusion to an already fragmented market.

Gary Shannon: It is important to note that swing is and has been a profitable business, which is rare among streaming services.

Gary Shannon: Our Q4 results were impacted by increasingly competitive screening market programmers continue to spend less on their core linear TV product, which we pay for and continue to shift investment into their own direct to consumer services, even though these efforts have been largely unprofitable.

Gary Shannon: In particular, the Warner Brothers discovery decision to make TNT and TBS sports available free to Max and increasing simulcast and sports programming on ESPN, plus or Disney and Peacock from NBC U S added more confusion to an already fragmented market.

Gary Shandman: Regardless, we continue to invest in experiences to delight our customers and increase engagement, including a new loyalty program that gives our subscribers a chance to win valuable prizes the more they use our service. Recent improvements to our experience drove monthly viewership per subscriber up over 15% year over year. And we're also really pleased with the growth of Sling FreeStream, our free ad-supported service, which recently launched the industry's first free DVR.

Gary Shannon: Regardless, we continue to invest in experiences that delight, our customers and increase engagement, including our new loyalty program that gives our subscribers a chance to win valuable prizes. The more they use our service recent improvements to our experience drove monthly viewership per sub up over 15% year over year.

Gary Shannon: And we're also really pleased with the growth of our sling free stream, our free AD supported service, which recently launched the industry's first free D. D. R.

Hamid Akhavan: In 2024, we'll continue to innovate on the platform to ensure we're delivering the content, features, and experience our paid and free customers want. I'd like to now turn it back to Hamid, who will cover retail wireless. Thank you, Gary.

Gary Shannon: In 2024 will continue to innovate on the platform to ensure we are delivering the content features and experience our paid and free customers want.

Speaker Change: I'd like to now turn it back to me, who will cover retail wireless.

Me: Thank you Gary.

Speaker Change: With the departure of Mike Kelly I will take the helm of our retail wireless business, while we search for my successor.

Hamid Akhavan: With the departure of Mike Kelly, I will take the helm of our retail wireless business while we search for Mike's successor. This will consist of overseeing the strategy and operations as well as repositioning the business to take advantage of our owner economics with the arrival of our network. In regard to refill wireless, we have put the majority of the building blocks in place to become the nation's fourth facilities-based wireless carrier, but we have not yet optimized our marketing and acquisition tactics, particularly with postpaid customers. We finished the year with approximately 7.4 million subscribers, down approximately 8% from 2022, which was partly due to our focus on higher-value subscribers with better devices as evidenced by lower subscriber churn in 2023. We also took steps to optimize our sales channels and programs, which in some cases reduced unprofitable offerings and underperforming dealers.

Speaker Change: This would consist of overseeing the strategy and operations as well as repositioning the business to take advantage of our owner economics with the arrival of our network.

Speaker Change: There's lots of recent wireless we have put the majority of the building blocks in place to become the nation's food facilities based wireless carrier, but we have not yet optimized our marketing and acquisition tactics, particularly be postpaid customers.

Speaker Change: We pushed our they finished the year with approximately $7 4 million subscribers down approximately 8% from 2022, which was partly due to our focus on higher value subscribers with better devices as evidenced by lower subscriber churn in 2023, we also took steps to optimize our sales channels and programs.

Speaker Change: In some cases reduced unprofitable offerings and underperforming dealers.

Hamid Akhavan: We do see positive trends to build upon, including higher adoption of value-added services such as our Boost Protect device insurance offerings and higher auto-pay penetration resulting in lower charges. However, the availability of mobile devices compatible with our network has, until now, been limited. We have made great strides in this area over the past six months, adding the iPhone 15 lineup, the all new Samsung Galaxy S24 devices, and the Motorola Razr, all of which we expect will help our economy going forward. In January, Boost got off to a fast start, launching seven new devices compatible with our network.

Speaker Change: We do see positive trends to build upon including higher attachment of value added services, such as our whose protect device our insurance offerings and higher auto pay penetration, resulting in lower churn.

Speaker Change: Availability of mobile devices compatible with our network has up until now have been limited.

Speaker Change: You made great strides in this area over the past six months, adding the iPhone 15 lineup. The all new Samsung Galaxy S 24 devices and the Motorola razor all of which we expect will help our economics going forward.

Speaker Change: In January boosts got off to a fast start launching seven new devices compatible with our network as we shift our device speaks two five G network compatible handsets, we are seeing higher unit cost, which we expect will be more than offset from the savings arising from the use of our own network.

Hamid Akhavan: As we shift our device mix to 5G network-compatible handsets, we are seeing higher unit costs, which we expect will be more than offset from the savings arising from the use of our own network. In addition, we will focus our efforts to profitably expand our current target customer segments through competitive offers, flexible service options, and outstanding customer experiences that exceed the current industry level. It is our goal to ramp up significant positive momentum by the end of 2024 as we shore up our branding, marketing, and operations for the business unit. I will now hand the call over to John to cover network deployment. Thank you, Hamid. We met our June 2023 coverage milestone by offering broadband service to over 70% of the US population, as confirmed by the FCC, covering more than 240 million Americans with connectivity through the latest technology. Today, our network provides 5G broadband coverage to over 73% of the U.S. population and 5G voice coverage to more than 200 million Americans, with a competitive device portfolio and domestic and international roaming partners.

Speaker Change: In addition, we will focus our efforts to profitably expand our current target customer segments through competitive offers flexible service options in outstanding customer experiences that exceed the current industry levels.

Speaker Change: It is our goal to ramp up significant positive momentum by the end of 'twenty 'twenty four as we sure up our branding marketing and operations for the business unit.

Speaker Change: Let me now hand, the call over to John you've covered network deployment.

John Swearing: Thank you Amit.

John Swearing: We met our June 2023 coverage milestone by offering broadband service to over 70% of U S population as confirmed by the FCC covering more than 240 million Americans with connectivity through the latest technology.

John Swearing: Today, our network provides five G broadband coverage to over 73% of the U S population and five G voice coverage to more than 200 million Americans with a competitive device portfolio and domestic and international roaming partners.

Unknown Attendee: This milestone not only marks an expansion of the world's first 5G Open RAN network but also affirms our steadfast commitment to advancing America's technological leadership in wireless. We continue to expand, optimize, meet milestones, and advance the Boost wireless network buildout in alignment with our network development. During our last call, we indicated that we'd launch over 20,000 on-air sites by the end of the year, and we exceeded that mark. Booth Wireless Network, as recently noted by Signals Research Group, offers a very good user experience and is fast.

John Swearing: This milestone not only marks an expansion of the world's first <unk> open ran network, but also affirms our steadfast commitment to advancing America's technology leadership in wireless.

John Swearing: We continue to expand optimize meet milestones and advanced the boost wireless network build out in alignment with our network development plan.

John Swearing: During our last call, we indicated that we'd launch over 20000 on air sites by the end of the year and we exceeded that mark.

John Swearing: The Booth wireless network as recently noted by signals Research group offers a very good user experience and fast speeds.

Unknown Attendee: We have firm plans in place to continue to move Boost customers with compatible devices to our network to take advantage of the owner's economy. I'd like to turn it over to Paul Gaske, who will cover broadband and satellite service, and the Satellite Services segment operates in both the consumer and enterprise markets. In line with our strategy, we expect a gradual shift in the mix of revenues from consumer to enterprise, and we anticipate that in 2024, our enterprise revenues will surpass consumer revenues for the first time. Our consumer business under the HughesNet brand ended the year with approximately 1 million satellite broadband subscribers, down approximately 224,000 from 2022, due primarily to our capacity limitations, competitive pressure, and more selective customer screening as we focus on more profitable subscribers. As evidenced by our historically high ARPU, Jupiter 3 commenced operations in late 2023.

John Swearing: We have firm plans in place to continue to move boost customers with compatible devices to our network to take advantage of owners economics.

John Swearing: I'd like to turn it over to Paul Gaskey, who will cover broadband and satellite services.

Paul Gaske: And in satellite services segment operates in both the consumer and enterprise markets in.

Paul Gaske: In line with our strategy, we expect a gradual shift in mix of the revenues from consumer to enterprise and we anticipate that in 2020 for our enterprise revenues will surpass <unk>.

Paul Gaske: Tumor revenues for the first time.

Our consumer business under the Hughesnet brand ended the year with approximately 1 million satellite broadband subscribers down approximately 224000 from 2022 <unk>.

Paul Gaske: Due primarily to our capacity limitations competitive pressure and more selective customer screening as we focus on more profitable subscribers.

Paul Gaske: Evidenced by our historically high ARPA.

Paul Gaske: Jupiter three commenced operations in late 2023. This satellite provides significant additional capacity, allowing us to be more competitive and responsive to customer demands for greater speeds and higher data allowances.

Paul Gaske: This satellite provides significant additional capacity, allowing us to be more competitive and responsive to customer demands for greater speed and higher data allowances. Early feedback from customers is quite positive and will help us reverse the subscriber loss trend in 2023. Our huge enterprise business consists of many diverse systems and service components. We finished 2023 with a multi-year backlog of approximately $2 billion. And our order bookings in the fourth quarter of 2023 came in strong at $694 million. Of note, in the fourth quarter, we announced the receipt of a major contract from Delta Airlines to provide in-flight communications to over 400 Boeing 717 and regional jets. This weight-optimized, high-performance aeronautical solution utilizes advanced artificial intelligence to power the Hughes In-Flight Management System, which includes a multi-orbit antenna and Hughes-Jupiter-KA band satellite capacity.

Paul Gaske: Early feedback from customers is quite positive and will help us reverse the subscriber loss trend of 2023.

Paul Gaske: Our Hughes enterprise business consists of many diverse systems and service components. We finished 2023 with a multiyear backlog of approximately $2 billion and our order bookings in the fourth quarter of 2023 came in strong at $694 million.

Paul Gaske: Of note in the fourth quarter, we announced the receipt of a major contract from Delta Airlines to provide in flight communications to over 400, Boeing 707 and regional Jets.

Paul Gaske: This weight optimized high performance aeronautical solution utilizes advanced artificial intelligence to power. The Hughes in flight management system that includes a multi orbit antenna and Hughes Jupiter <unk> band satellite capacity.

Paul Gaske: This order marks a change in strategy for Hughes as we begin to directly serve airlines around the globe. Turning to our OneWeb business, we began initial shipments in December of a Hughes-manufactured user terminal based on our unique flat-panel, electronically-sphered antenna technology, manufactured in our U.S.-based facility. In parallel, we continue to deliver gateways to OneWeb for their global network. As for our Managed Services business, which focuses on providing highly reliable and secure communication services to enterprises, it was named by Gartner as a leader in the 2023 Gartner Magic Quadrant. This recognizes us as one of the few companies that has the ability to deliver best-in-class enterprise services on a global scale. With that, I'll turn it back over to Hamid. Thank you, Paul.

Paul Gaske: This order marks a change in strategy for Hughes as we begin to directly serve airlines around the globe.

Paul Gaske: Turning to our one way business. We began initial shipments in December of a huge manufactured user terminal based on our unique flap panel electronically steered antenna technology.

Paul Gaske: Manufactured in our U S based facility.

Paul Gaske: In parallel we continued to deliver gateways to one web for their global network.

Paul Gaske: As for our managed services business, which focuses on highly providing highly reliable and secure communication services to enterprises. He was named by Gartner as a leader in the 2023 Gartner Magic quadrant. This recognizes us as one of the few companies that has the ability to deliver best in class Enterprise services on a global.

Paul Gaske: Scale.

Paul Gaske: I'll turn it back over to Hamid.

Hamid: Thank you Paul.

Hamid Akhavan: As noted, we have work to do to strengthen our capitalist structure, achieve sustainable and profitable customer growth, and develop as an integrated new athlete in global telecom. We will utilize the experience and resources from within our established business units to realize the growth opportunities of our newer business units. As a newcomer in the wireless industry, naturally, we have significant challenges ahead. But we also see opportunities which the incumbents are unable to capture due to their legacy obligations, whether it be protecting their higher prices for the existing base or being tied to inflexible operation systems.

Hamid: We have work to do to strengthen our capital structure and achieve sustainable and profitable customer growth and develop as an integrator you athletes in global telecom.

Hamid: We will utilize the experience and resources from within our established business units to realize the growth opportunity of our newer businesses.

Hamid: As a newcomer even wireless industry naturally we have significant challenges ahead, but we also see opportunities, which the incumbents are unable to capture due to their legacy obligations, whether it be protecting their higher prices for existing base or being tied to in flexible operation systems, we will focus on identifying and leveraging these advantages.

Operator: We will focus on identifying and leveraging these advantages wherever possible in each of our markets. We will also find new ways to bundle our diverse products across the new EchoStar family to provide innovative solutions and services customers want. We are only about 60 days into the merger, but as mentioned, we have already put significant improvement initiatives in motion to increase our momentum across all business units of the new EchoStar. With that, we'll open it up to Q&A. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate that your line is in the question queue.

Hamid: Wherever possible in each of our market segments. You will also find new ways to bundle our diverse products across the new Echostar family to provide innovative solutions and services customers want.

Hamid: We are only about 60 days into the merger, but as mentioned we have already put significant improvement initiatives in motion to increase our momentum across all business units of the new Echostar with that we'll open it to Q&A.

Hamid: Okay.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate that your line is in the question queue.

Operator: And you may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we pull for questions. Thank you. Our first question comes from the line of Rick Prentiss with Raymond James. Please proceed with your question. Thanks. Good morning, afternoon, everyone.

Speaker Change: And you May press Star two if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Speaker Change: Thank you art.

Speaker Change: Our first question comes from the line of Ric Prentiss with Raymond James. Please proceed with your question.

Thanks, Good morning afternoon, everyone.

Richard Hamilton Prentiss: Which is the prepared remarks.

Richard Hamilton Prentiss: We appreciate the prepared remarks. We want to start with unencumbered assets, obviously structural changes. Can you talk a little bit about the spectrum securitization market? Is it open? What kind of prices are you seeing out there?

Richard Hamilton Prentiss: I'll start with the unencumbered assets, obviously structural changes.

Richard Hamilton Prentiss: Can you talk a little bit about the spectrum securitization market is an open what kind of prices are you seeing out there and just maybe even a broader question what kind of timeline should we be thinking of as far as addressing kind of a financial plans that you're pursuing in advance of the November maturity.

Hamid Akhavan: And maybe even a broader question, what kind of timeline should we be thinking of as far as addressing the financial plans that you're pursuing in advance of the November maturity? Rick, thank you. Good to hear from you.

Speaker Change: Great. Thank you and good to hear you as I mentioned.

Hamid Akhavan: As I mentioned, first, I want to make sure that we plan on meeting our immediate obligations on Mars, and then we have the window, obviously, till November to address the next maturity. Here, we obviously have access to multiple ways to do that.

Speaker Change: First I want to make sure that you know we plan on meeting our immediate obligations in March.

Speaker Change: And then we have the window, obviously till November two.

Speaker Change: Dress the next maturity here.

Speaker Change: Obviously, you have access to multiple ways to do that you know one of the ways is the one you are referring to which is unencumbered spectrum assets. You know that's a market that generally understood bye bye.

Hamid Akhavan: You know, one of the ways is the one you were referring to, which is on encumbered spectrum assets. You know, that's a market that is generally understood by investors. I think there's always interest in that market because the commodities in that market are, you know, well known. We're not going to comment on the specifics of how we're going to do that. But with spectrum assets, it's one way to get there.

Speaker Change: Bye bye to investors I think theirs.

Speaker Change: There's always interesting that market because the commodities in that market are well known we were not going to comment on the specifics of how are we going to do that but it was spectrum assets. It's it's one way to get there as Paul I've also mentioned, we do have other assets such as the subscribe as we mentioned from from our pay TV business.

Hamid Akhavan: As Paul also mentioned, we do have other assets, such as the subscribers we mentioned and the pay TV business. Look, we're going to take our time and make a transaction that is in the best interest of all parties, the company, and all the stakeholders involved. And we have a significant amount of time to do that. You know, I do not find myself and the company under the gun to make a transaction in a, you know, rapid fire. As I said, the window is long enough for us to, you know, make a sound decision that is a long-term solution for the company. And we're not going to compromise. You know, by making a quick decision.

Speaker Change: Look we're going to take our time and make a transaction that is in the best interest of all parties the company and all the stakeholders involved and we have a significant amount of time to do that.

Speaker Change: You know I do not find myself in the company under the gun to make a transaction in it you know rapid fire as I said the window is long enough for us to make a sound decision that is a long term oriented solution for the company and we're not going to compromise.

Speaker Change: You know by making a quick decision there.

Paul Orban: Okay. You mentioned the billion dollar total expense savings. Can you help unpack that a little bit about which silo it is in?

Speaker Change: Okay.

Speaker Change: The billion dollar total expense savings.

Speaker Change: Savings can you help unpack that a little bit about which silo is at and what kind of line items just to give us a rough shot him how about $1 billion will be achieved.

Paul Orban: What kind of line items are in it to give us a rough shot of how that billion dollars will be achieved? I'll pass that to Paul. Good question. It's across the board in all segments. All business units are contributing. Obviously, pay TV is going to be taking the lion's share of it, but it's across the board in retail, wireless, the 5G deployment, and even Hughes is contributing to that. It's going to be both in G&A as well as in cost of services and in cogs. However, we are using some of that to invest back into the business. So you won't see 100% of that come through, as we're making other sound investment choices. Yeah, there's also retail wireless. Accelerating our transition of customers to on net will significantly improve our economics.

Speaker Change: Pass that to Paul Good question its across the board in all segments. All business units are contributing obviously pay TV is gonna be taken the lion's share of it but it's across the board in retail wireless <unk>.

Paul: <unk> deployment and even shoes is contributing to that.

Paul: It's gonna be bolt in G&A as well as cost of services and in Cogs. However, we are using some of that there was invest back into business. So you won't see 100% of that come through as we're making other sound investment choices.

Paul: And then just also on the retail wireless you know.

Paul: Accelerating our transition of customers to on net will significantly improve our economics I mean I.

Paul Orban: I mean, I think we're having great experiences there. And as John mentioned, you know, that that's on the way and we are. That significantly helps going forward as part of the $1 billion and beyond. One more quick one from me: if I could, can you quantify roughly the impact that Hugh Hurst had on the quarter as far as subs, either churn or subscriber losses? We're not breaking that out.

Paul: We're having great experiences there and as John mentioned.

Paul: On the way in beer.

Paul: That significantly helps going forward as part of the one 1 billion and beyond.

Speaker Change: One more quick one for me if I could the can you quantify roughly the impact that.

Speaker Change: The hue Hearst had on the on the quarter as far as subs, either churn or subscriber losses.

Speaker Change: Where we're not breaking that out, but obviously you know what I talked about I'm sorry. This is Gary.

Gary Shandman: But obviously, you know, what I talked about, sorry, this is Gary. What I talked about earlier is, you know, there was some drag overall on our overall subscriber numbers in Q4. And like I mentioned, we've resolved most of those issues with a number of partners we have, and we're looking forward to a less disrupted 2020. Great, thanks a lot.

Gary Shannon: I talked about earlier as you know there was some drag overall in our overall subscriber numbers in Q4 and like I mentioned, we've resolved most of those issues with with a number of partners. We had and we're looking forward to a less disrupted 2024.

Speaker Change: Right great. Thanks, a lot took a long time last night getting through all the details, but I appreciate all the stuff you put out there. Thanks.

Richard Hamilton Prentiss: It took a long time last night getting through all the details, but I appreciate all the stuff you put out there. Thanks. Our next question comes from the line of Walter Piasik with Light Shed.

Speaker Change: Sure.

Speaker Change: Okay.

Our next question comes from the line of Walter Piecyk with <unk>. Please proceed with your question.

Speaker Change: Thanks.

Walter Piecyk: I guess first just is this charlie's absence from the call.

Walter Piasik: Please proceed with your question. Thanks. I guess first, just does Charlie's absence on the call imply any kind of change in how active he is?

Imply any kind of change in how activity is in.

Walter Piecyk: You know dealing with what's going on at the company and then I guess.

Hamid Akhavan: and, you know, dealing with what's going on at the company. And then, Specifically in wireless, if you're having to cut costs to hit your version of operating cash flow or free cash flow, how does that impact your ability to get people to? have an interest in purchase, you know, the phone and the value proposition that you're offering in the market right now, it seems like that's something that requires more investment, not less. I have two different questions. I'll try to take them one after another, but first of all, I want to mention that today is Charlie's birthday, so we give him a day off.

Walter Piecyk: Typically in wireless if you're having to.

Walter Piecyk: Cut cost to hit your your version of operating cash flow, our free cash flow, how does that impact your ability to get people to.

Walter Piecyk: Have interest in purchase you know the phone and the value proposition that you're offering in the market right now it seems like that's something that requires more investment not less.

Speaker Change: I have two different questions I'll try to take both one after another well first of all I want to mention that today's Charlie's birthday.

Speaker Change: So beginning of the day offs and well I want to wish Charlie our happiest and healthiest he ever hits, but coming to more specific answer to that question.

Hamid Akhavan: And I want to wish Charlie the happiest and healthiest year ahead. But coming to a more specific answer to that question, you know, as I have taken over the day-to-day operation of the business, I've been in the seat now for slightly longer than 90 days running the business. That has freed up Charlie, that's given Charlie the ability to focus on more strategic and longer-term developments. Hopefully, I here and with the, you know, confident team that we have around this table can answer all the questions for you. I'm delighted that Charlie has felt comfortable enough to let me run the business, so we can focus on bigger picture opportunities in the future. Coming to the retail wireless businesses specifically, look, I don't think this is going to be, and for us at least, it's not going to be, you know, head-to-head matching, dollar-for-dollar, you know, positioning in the marketplace. Naturally, we don't have the resources that the other three have, which command more than 93% of the marketplace.

Speaker Change: As I have taken over the day to day operation of the business <unk> been in the seat now for a slightly longer than 90 days running just running the business you know that that has freed up Charlie that's given the Charlie the it believes the focus on a more strategic and longer term developments.

Speaker Change: Hopefully I hear and competent team that we have around this table can answer all the questions.

Speaker Change: For you so hum.

Speaker Change: I did that Charlie has felt comfortable enough to let me run the business and so.

So we can focus on the bigger picture opportunities in the future.

Speaker Change: Coming to the retail wireless business, specifically, but I don't think this is gonna be and for US that this is not going to be you know head to head matching dollar for dollar.

You know, it's a positioning in the marketplace is naturally we don't have the resources that the the other three have which command more than 93% of the marketplace.

And so we need to we need to go to market differently and much more efficiently and that's one of the things that I highlighted in the in my prepared remarks that we're optimizing that today and do throughout the year, you're going to be better and better step by step you know that's one of the examples is that you know we are more focused on local advertising.

Hamid Akhavan: And so we need to go to market differently and much more efficiently. And that's one of the things that I've highlighted in my prepared remarks, that, you know, we are optimizing that today and throughout the year, we're going to be better and better step-by-step. As one example, we are more focused on, you know, local advertising and local go-to-market rather than national TV.

Speaker Change: <unk> and local go to market that has a national TV. We think that's a that's a higher yield for us is gonna be focusing on developing our digital channel which will be.

Speaker Change: Better experience that also it doesn't put us in a big channel conflict with.

Stores and so there's a number of ways that we are thinking creatively plus the fact that we have a network that is right now under utilized we don't we're not.

Speaker Change: Walk around I'm getting 789 hundred megabit per second connections on you know a typical android or iPhone device.

Speaker Change: You know that there are some differentiating features we have that you know that I think we need to maximize in terms of positioning rather than just go dollar for dollar spending acquisition cost you know the traditional way. So it's an exotic car. It's it's a it's a different way to do it but we are very excited about developing that through.

Hamid Akhavan: You know, we think that's a higher yield for us. I think we're focusing on developing our digital channel, which will be a better experience and also doesn't put us in a big channel conflict with, you know, stores. And so there's a number of ways that we are thinking creatively, plus the fact that we have a network that is right now underutilized. You know, when I walk around, I'm getting seven, eight, nine hundred megabits per second connections on, you know, a typical Android or iPhone device. You know, there are some differentiating features we have that, you know, that I think we need to maximize in terms of positioning rather than just go dollar-for-dollar on acquisition costs, you know, in a traditional way. So it's an exotic art.

Speaker Change: 2024.

Speaker Change: Thanks, and can you just also.

Speaker Change: Do you have a sense of when you might get hit the the final milestone of the 75% for 2025 milestone with spectrum.

Speaker Change: Fully securing you know.

Speaker Change: All that spectrum I, probably has an impact on your ability to use that as an asset.

Speaker Change: You can borrow against any timeline on on hitting that because you said I think you said I think Springer said you were $72 73, so you're only a couple hundred basis points left.

How much longer to get there.

Hamid Akhavan: It's a different way to do it, but we are very excited about, you know, developing that throughout 2024. Thanks. And can you just also, if you have a sense of when you might hit the final milestone or the 75%, the 2025 milestone on the spectrum, you know, fully securing, you know, that spectrum, that probably has an impact on your ability to use that as an asset, you can borrow again. It's just any timeline on heading that because you said, I think you said, I think Swerynga said you were 72, 73. So you're only a couple of basis points left. How much longer will it take you to get there?

Yeah, you know what.

Speaker Change: We have made substantial progress towards meeting our goals for 'twenty 'twenty four 'twenty 'twenty five the milestones of 2025, depending on our.

Speaker Change: And our success in our fundraising, which I mentioned earlier, we are we.

Speaker Change: Could meet those milestones so, but having said that it is my personal opinion that you know that doesn't really translate.

You know it into a competitive offering for the American consumers, which has been the intent of the FCC.

Speaker Change: I just you know that milestone certainly is within reach once we if we manage to get our fundraising.

Hamid Akhavan: Yeah, you know, we have made substantial progress towards meeting our goals for 2024 and 2025. The milestones are 2025. You know, depending on our, you know, our success and our fundraising, which I mentioned earlier, we could meet those milestones. So, having said that, it is my personal opinion that that doesn't really translate into a competitive offering for American consumers, which has been the, you know, intent of the FCC. I just, you know, that milestone is certainly within reach once we, and if we manage to get our fundraising. But I don't think he's going to, you know, change the picture in the nation in a significant way.

Speaker Change: But I don't think it's going to change the picture in the nation and in a significant way.

Speaker Change: Well, if it's John just.

Speaker Change: To clarify we are.

Speaker Change: Overall U S population attainment with our network, but components of the 2025.

Speaker Change: <unk> buildout commitments are little different because that's measured at the PAA level. So there are more rural sites that go into that.

Speaker Change: Got it but just to go back to the last answer.

Speaker Change: I think you said, if you get the financing venue.

Speaker Change: The dollars in to get you to that felt like is it a chicken or egg thing in terms of you you want to get the money and then spend the Capex and then get the approval or.

Speaker Change: Get the hit the milestone and then use that as kind of a springboard to get the financing.

Speaker Change: What's coming first there I think you were saying that the financing has to come first.

Speaker Change: You know I.

Speaker Change: I wouldn't go as far as you know putting that in a sequential order I think these are activities that are running parallel you know theres quite a bit of upfront.

Hamid Akhavan: Well, it's John. Just to clarify, we have overall US population attainment with our network. But components of the 2025 build out commitments are a little different because that's measured at the PEA level. So there are more world sites, and that's a good one.

Speaker Change: No not not very expensive work that has to be done for instance to secure their you know zoning and permitting and preparation and you know so it's not a linear spend is it's very exotic in terms of just scheduling of by geography by by by location you know zoning environment. So.

Unknown Attendee: Got it. But just to go back to the last answer, I think you said if you get the financing, then you put the dollars in to get you to the like. Is it a chicken or egg thing in terms of you want to get the money, and then spend the capital expenditure and then get the approval or not? Get the, you know, hit the milestone, and then use that as kind of a springboard to get the financing. What's coming first there? I think you were saying that the financing has to come. You know, I wouldn't go as far as, you know, putting that in a, you know, sequential order. I think these are activities that are running parallel. There's quite a bit of upfront, you know, not very expensive work that has to be done, for instance, to, you know, secure the zoning and permits and preparation. And, you know, so it's not a linear spend; it's very exotic in terms of just scheduling by geography, by location, you know, the zoning environment.

Speaker Change: I can't give you a very specific answer other than saying these are activities that would be running in parallel and we manage this on a very careful day to day basis.

Got it thank you.

Speaker Change: Our next question comes from the line of Bryan Kraft with Deutsche Bank. Please proceed with your question.

Hi, Good morning wanted to ask a few if I could first.

The large sequential step up in satellite services EBITDA in the fourth quarter to $155 million.

Bryan Kraft: I was wondering what drove that big improvement margin and where that should go directionally from here or is that like a good run rate or does it continue to improve or was there something anomalous that drove it so high in the quarter.

The second one was.

Bryan Kraft: You mentioned moving traffic on net from boost I'm. Just wondering if you could help us to think about the timeline for doing that it sounds like you expect progress. This year and then the last one I had was Hamid you talked a bit about flu symphonette, not getting a lot of traction in the market yet.

Walter Piasik: So, I can't give you a very specific answer other than saying, you know, these are activities that we run in parallel, and we manage this on a, you know, very careful day to day basis. Got it. Thank you. Our next question comes from the line of Brian Kraft with Deutsche Bank. Please proceed with your question.

Just curious what you think really has hindered the progress I know you tried a national AD campaign in late September early October.

Bryan Kraft: You launched on Amazon. So is it not working capital behind it is that the branding and are you seeing any real proof points yet on some of the things that you plan to do to gain momentum that you just mentioned in response to Walter's question. Thank you.

Brian Kraft: I wanted to ask a few questions, if you could. First... the large sequential step up in satellite services EBITDA in the fourth quarter to $155 million. I just was wondering what drove that big improvement margin and where that should go directionally from here. Is that like a good run rate? Does it continue to improve? Or, you know, was there something anomalous that drove it so high in the quarter?

Bryan Kraft: Okay, Paul perhaps you can comment on the EBITDA.

Paul: Sure. It certainly could you just clarify your <unk>.

Paul: Question, just a little bit more.

Paul: Sure I think the satellite services EBITDA in the fourth quarter came in at about 155 million.

Brian Kraft: The second one was... You mentioned moving traffic on the net from Boost. I was just wondering if you could help us to think about the timeline for doing that. It sounds like you expect progress this year. And then the last one I had was, Hamid, you talked a bit about, you know, Boost Infinite not getting a lot of traction in the market yet. Just curious, though, what you think really has hindered the progress? I know you tried a national ad campaign late in September or early October.

Paul: And in the previous few quarters, it had actually been decelerating.

Paul: So that was a pretty large sequential step up and I was just trying to understand what drove that big improvement and how to think about that on a go forward basis like is that a good run rate should it continue to build or was there something in the fourth quarter that made it unusually high that's not going to repeat.

Speaker Change: Oh, certainly yeah. So.

Speaker Change: So typically our fourth quarters tend to have higher enterprise.

Brian Kraft: You launched on Amazon. So is it the network? Is there capital behind it? Is there branding?

Speaker Change: Our results and so we had a strong enterprise in the fourth quarter.

Speaker Change: You know I can't tell you that exact trend will continue but normally we have a cyclic cyclicality with that that the fourth quarter is stronger.

Hamid Akhavan: And are you seeing any real proof points yet on some of the things that you plan to do to gain momentum that you just mentioned in response to Walt's question? Thank you. Okay, Paul. Perhaps you can comment on the DVD.

Speaker Change: Okay got it thank you.

Speaker Change: Paul maybe you want to comment on the on net sure I'll take the second piece and thanks for the question.

Paul Orban: Sure, certainly. Could you just clarify your question just a little bit more? Sure, I think the satellite services EBITDA in the fourth quarter came in at about $155 million. And in the previous few quarters, it had actually been decelerating.

Paul: While we don't publicly share numbers utilization of the network continues to grow every day.

Paul: As mentioned earlier, we're now covering more than 200 million Americans with five G voice are underway to 240 million plus.

Paul: And as an update over the last quarter roughly two thirds of the devices that we're now sourcing are compatible with our network.

Brian Kraft: So that was a pretty large sequential step up. And I was just trying to understand what drove that big improvement and how to think about that on a go forward basis. Like, is that a good run rate? Should it continue to build? Or was there something in the fourth quarter that made an unusually high that's not going to repeat?

Paul: So we're loading customers with compatible devices in really three separate paths.

Paul: Your new customer Activations upgrades, we're actually now doing over the air migrations, which are generally seamless to the customer.

Paul: As you know we've been actively working to seed <unk> compatible devices with customers for months now and while there was additional cost in doing so it's investment that will pay off as we benefit from owner economics and reduced <unk> expenses in 2024.

Paul Orban: Oh, certainly. Yeah. Typically, our fourth quarters tend to have higher enterprise results. And so we had strong enterprise results in the fourth quarter. You know, I can't tell you that exact trend will continue. But normally, we have a cyclicality with that, that the fourth quarter is stronger.

Paul: And the plan that we talked about last quarters, largely on track with the different legs of the stool there coverage devices.

Hamid Akhavan: Okay, got it. Thank you. Hamid, do you want to comment on the un-net? Sure, I'll take the second piece.

Paul: Leading to lower them, you know expenses over the year, but we're not going to break that out right. Now there's just a lot of work to do and we're focused on it every day.

Unknown Attendee: And thanks for the question. While we don't publicly share numbers, utilization of the network continues to grow every day. As mentioned earlier, we're now covering more than 200 million Americans with 5G voice, on their way to $240 million-plus.

And I will take the third part of your question, which had to do with boost infinite.

Speaker Change: So first I want to say that you know.

Speaker Change: As I walked into the business.

Speaker Change: I was incredibly impressed by what was achieved on the network side and I can't be more Paul look I launched the first two <unk> in the U S at Tcs Pronto.

Unknown Attendee: And as an update, over the last quarter, roughly two-thirds of the devices that we're now sourcing are compatible with our network. And so we're loading customers with compatible devices and really three separate paths: new customer activations, upgrades, and over-the-air migrations, which are generally seamless to the customer. As you know, we've been actively working to seed MNO-compatible devices with customers for months now.

Speaker Change: And launched the first <unk> in Europe with Deutsche Telekom as the CTO of the Deutsche Telekom to you about Europe I created the the forum for the LTE in Europe in the first time and so I've been part of the <unk> launched three G lawn <unk> launch enough <unk> and this has been the best I've seen I I have never been so impressed by <unk>.

Speaker Change: <unk> point B and.

Unknown Attendee: And while there was an additional cost in doing so, it's an investment that will pay off as we benefit from owner economics and reduce MV&O expenses in 2024. And the plan that we talked about last quarter is largely on track with the different legs of the stool there, coverage, and devices, leading to lower MV&O expenses over the year. But we're not going to break that out right now.

Speaker Change: So exciting, but having said that.

Speaker Change: The company had been focused purely primarily on builds as a project company not as a P&L company related to the mobile and wireless.

Speaker Change: So you know as a result of that I mean that the it hasn't been enough focus on developing the go to market the product positioning.

Speaker Change: The experience the digital experience of the customers on Onboarding. So when I looked at that I realized that you know it doesn't make sense for us to spend a heck of a lot of money advertising and pulling customers that we are not going to be delighted not because of the phenomenal network, but also just the experience of giving them.

Hamid Akhavan: There's just a lot of work to do, and we're focused on it. Now, I will take the third part of your question, which had to do with Boost Infinite. So first, I want to say that, you know, as I walked into the business, I was incredibly impressed by what was achieved on the network, and I couldn't be more positive. Look, I launched the first 2G in the US at PCS Prime, and I launched the first 3G in Europe with Doja Telecom as the CTO of Doja Telecom T-Mobile Europe. I created the forum for LTE in Europe for the first time, and so I've been part of the 2G launch, the 3G launch, the 4G launch, and now 5G, and this has been the best. I have never been so impressed by starting point B.

Star that's fresh fish first impressions, so kind of dialed it back.

Speaker Change: One of the gear you know I would not attribute and this is a very strong statement I would not attribute in any way slower start although postpaid business to lack of customer interest I mean do you have metrics here that says you know we have phenomenal number of customers hundreds of times more than the customers reactivate it interested in coming in we just didn't have us and our partners are.

Speaker Change: Nic partners didn't have the right system setup.

Speaker Change: Were not optimally.

Speaker Change: Planned and connected and.

Hamid Akhavan: So exciting, but having said that, The company had been focused purely, primarily on Bill. Projects, Unknown Executive, Unknown Projects, Unknown Projects, Unknown Projects, Unknown, The experience, the digital experience of the customers on onboarding, so when I looked at that I realized that it doesn't make sense for us to spend a heck of a lot of money advertising and pulling customers that we are not going to be delighting, not because of the phenomenal network, but also just the experience of giving them that start, that fresh first impression. So, kind of dialed it back, want to re-gear.

Speaker Change: The bug for a perfect experience between us and our strategic partners and so.

Speaker Change: It makes sense for us to kind of review that and come back and that's what we're working on and obviously, we'll look.

Speaker Change: Gradually.

Speaker Change: You will see the improvements in the market I'm very excited about our chances, but again I just want to emphasize that I see us being a force in the market with all of the things that I've mentioned in my remarks.

Speaker Change: But our entry was not.

I would just say internally not not optimized and we will fix that reflects that this year.

Speaker Change: Okay. Thanks to all of you I appreciate it.

Hamid Akhavan: I would not, and this is a very strong statement, I would not attribute, in any way, a slower start to a post-paid business to lack of customer interest. We have metrics here that say we have a phenomenal number of customers, hundreds of times more than the customers we activated interested in coming in. We just didn't have, us and our partners, our strategic partners, didn't have the right system set up. The systems were not optimally planned and connected.

Speaker Change: Thank you. Our next question comes from the line of Jonathan Chaplin with New Street Research. Please proceed with your question.

Speaker Change: Yeah.

Jonathan Chaplin: Thanks, guys a couple of I guess, the first one is probably for handmade and Paul I was wondering if you could.

Jonathan Chaplin: Give us a sense of how.

Jonathan Chaplin: The discussions with bondholders progressed from here and as equity holders who are involved in that process. What are we going to see from from the outside is the next step you're coming out with an improved.

Hamid Akhavan: Debugging for a perfect experience between us and our strategic partners. And so, you know, it made sense for us to kind of re-gear that and come back. And that's what we're working on. And obviously, we'll, you know, gradually, you will see the improvements in the market. I'm very excited about our chance.

Jonathan Chaplin: Exchange offer or does it sort of all happened behind the scenes and does it make sense for you to raise new debt before you've figured out the exchanges on on existing debt. So that was the first question and then.

Hamid Akhavan: It's, but again, I just want to emphasize that I see us, you know, being a force in the market with all the things that I've mentioned in my remarks. But our entry was not, I would just say, internally not optimized and will be. Thanks to all of you. I appreciate it.

Jonathan Chaplin: I mean like almost a 100% sure that this is correct, but really to care up.

Jonathan Chaplin: Any confusion that might've been caused by Walts question I think its the case that the.

Jonathan Chaplin: The the test that you need to meet in 2025 is on a license by license basis, and I think it's the case with a 73% of the country that you've built out so far you're already protecting the value of the vast majority of your spectrum portfolio.

Brian Kraft: Thank you. Our next question comes from Jonathan Chaplin with New Street Research. Please proceed with your question. Thanks, guys. A couple.

Jonathan Chaplin: I guess the first one is probably for Hamid and Paul. I was wondering if you could give us a sense of how the discussions with bondholders will progress from here. And as equity holders who aren't involved in that process, what are we going to see from the outside? Is the next step you coming out with an improved exchange offer, or does it sort of all happen behind the scenes? And does it make sense for you to raise new debt before you've figured out the exchanges on existing debt?

Jonathan Chaplin: So you don't need to complete the build in order to raise money against that spectrum I think.

Jonathan Chaplin: Most of that spectrum is already locked up.

Jonathan Chaplin: Most of that value is locked up in it's just a.

Speaker Change: The piece that you need to compete actually has much lower value licenses in it. So just a clarification there. Thanks.

Hamid Akhavan: So that was the first question. And then I'm almost 100 percent sure that this is correct, but just to clear up any confusion that might have been caused by Walt's question. I think it's the case that the test that you need to meet in 2025 is on a license-by-license basis, and I think it's the case with the 73% of the country that you've built out so far, you're already protecting the value of the vast majority of your spectrum portfolio, and so you don't need to compete in the build in order to raise money against that spectrum. I think most of that spectrum is already locked up Most of that value is locked up, and it's just the piece that you need to complete that actually has much lower-value licenses in it.

Speaker Change: Yeah.

Speaker Change: Okay. Thank you I'll take the first part.

Speaker Change: You know I mentioned in my remarks that we are in active discussions with numerous parties right now to secure financing to meet these obligations, including the obligations. You mentioned you know we have significant inbound interest right now and from very reputable parties and Counterparties and beer.

Able to engage with anyone and all the stakeholders of good faith to find better solutions that and good solutions that are in the best interest of the company and all of that.

Speaker Change: Parties involved so.

Speaker Change: I can't tell you any specifics of how we are going to each one of these and what may end up being a what looks like is going to be the solution selected but as I said you know if you know many avenues and we will select the avenues as I said that we find it to be in the best interest of all parties are more to come on that but I don't Wanna.

Jonathan Chaplin: So, just a clarification there. Thanks. Okay, thank you. I'll take the first part. I mentioned in my remarks that, you know, we are in active discussions with numerous parties right now if you're financing to meet these obligations. Including the obligations you mentioned, we have significant inbound interest right now from very reputable parties and counter parties. And we are, you know, able to engage with anyone and all the stakeholders in good faith to find better solutions that are good solutions that, you know, are in the best interest of the company and all of the parties involved. So I can't tell you any specifics about how we are going to choose which one of these and what may end up being what looks like is going to be the solution selected.

Speaker Change: Myself and the company under the gun, we have the runway to make a proper decision and evaluate and make immeasured decision that is long term oriented it is not even our best interest and we are not focused on trying to find a solution that just kicks the can down the road and want a step at a time I think this is a business full of potential.

Speaker Change: So we see having the runway to execute them.

Speaker Change: With the assets that we have with a unique combination of things we could do come in.

Speaker Change: As a company that doesn't have the legacy obligations, we could be it could be disruptive will be disruptive and so you know that that's our mindset that that's our goal that's how we want to execute so.

Hamid Akhavan: But as I said, you know, we have many avenues, and we'll select the avenues, as I said, that we find to be in the best interest of all parties. More to come on that, but I don't want to put myself and the company under the gun. We have the runway to make a proper decision and evaluate and make a measured decision that is long-term oriented. It is not in our best interest to do that. Unknown Speaker, Unknown Speaker, I'm trying to find a solution that just kicks the can down the road one step at a time.

Speaker Change: We're not going to make a rash decision Paul if you want to add anything. Please go ahead of that yes, I agree with you we have a long runway at this point in time. So there's no reason for us to rush into anything we want to look at a holistic perspective and like I said in my comments, we're looking for operational flexibility and long term.

Paul: Financial stability, we just don't want to do one thing here, we got many things at our disposal levels that we can pull and we want to make a hopefully put together a solution. That's how some of our financial needs for the long term.

Hamid Akhavan: I think this is a business full of potential. We see having the runway to execute with the assets that we have, with the unique combination of things we could do, coming, you know, as a company that doesn't have the legacy obligations. We could be, we could be disrupted, we will be disrupted. And so, you know, that's our mindset. That's our goal. That's how we want to proceed. So, you know, we're not going to make a rash decision. Paul, if you want to add anything, please go ahead and add it. Yeah, I agree with you.

Paul: And Chuck can you comment on the coverage.

Chuck: Yes of course, and just to further clarify.

Chuck: The 25 commitments are on a license by license basis, that's correct.

Chuck: Obviously, there is a public information that you can read to get a better handle on the specifics there.

Chuck: It is also.

Chuck: True that the existing deployment does cover a significant portion of our 2025 commitments.

Paul Orban: You know, we have a long runway at this point in time, so there's no reason for us to rush into anything. We want to look at things from a holistic perspective. And like I said in my comments, we're looking for operational flexibility and long-term financial stability. We just don't want to do one thing here.

Chuck: As I've mentioned on earlier calls, it's a more surgical built.

Chuck: Because we have to achieve a license by license.

Chuck: Milestones.

Chuck: So we're working through getting those sites planned.

Chuck: Working through site acquisition I think can be had mentioned earlier, we're working on things in parallel.

Chuck: To make sure that we do what we need to do there.

Paul Orban: We have many things at our disposal levels that we can pull from, and we want to put together, hopefully, a solution that solves all of our financial needs. Joe, can you comment on the... Yes, of course. And just to further clarify, the 25 commitments are on a license by license basis. That's correct. Obviously, there is public information that you can read to get a better handle on the specifics there. But it is also...

Chuck: So John if I could just follow up on that I think my point, it's a little bit different. It's just the licenses that you've already covered at 75% with your existing build I think there are a lot more valuable.

Chuck: Then the licenses that you havent covered yet.

Chuck: And so when you look at the value of the portfolio that you've already protected with a build I think it's.

Chuck: You know its 80 or 90% of the value of the portfolio, even though it's much lower percentage of the licenses that you've already covered at 75%.

Jonathan Chaplin: It's true that the existing deployment does cover a significant portion of our 2025 commitments. But, as I mentioned on earlier calls, it's a more surgical build because we have to achieve, license by license, milestones. So we're working through getting those sites planned, working through site acquisition. I think Hamid mentioned earlier that we're working on things in parallel to make sure that we do what we need to do. So John, if I can just follow up on that, I think my point is a little bit different. It's just the licenses that you've already covered at 75% with your existing build that I think are a lot more valuable than the licenses that you haven't covered yet. And so when you look at the value of the portfolio that you've already protected with the build, I think it's, you know, it's sort of 80 or 90% of the value of the portfolio, even though it's a much lower percentage of the licenses that you've already covered at 75%.

Speaker Change: I think you're onto the right track there.

The sites that would be in front of us are lower pops per site more rural.

Speaker Change: So I think I think you got it.

Got it thanks, guys I really appreciate it.

Speaker Change: Our next question comes from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question.

Thanks.

Unknown Attendee: I mean, thanks for all the commentary on the network and retail wireless as you've come in with fresh eyes.

Unknown Attendee: What should we expect from this business. This year I mean are there things were gonna see through the course of 'twenty for either net adds are improving service gross margins or you know just in the reported results that the market can see that the that this network that you say is you know is excellent and ready to go.

Unknown Attendee: I didn't know a business because obviously, even if you raise capital to deal with the November maturities, there's more I'm sure as you know.

Unknown Attendee: On the line and and we sort of know the trend line in video. So this is really about building something real.

Jonathan Chaplin: I think you're on to the right track there. The sites that would be in front of us are lower POPs per site, and more rural, so I think you have it.

Unknown Attendee: With boost so maybe you can just set expectations for us.

Jonathan Chaplin: Thanks guys, I really appreciate it. Our next question comes from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question. Thanks, Hamid.

Unknown Attendee: Or maybe the answer is you know given the cost cutting and free cash flow. This is not a year you know we should expect to see the business inflected anyway would love to hear your thoughts on that and then I just had a follow up.

Unknown Attendee: Thanks for all the commentary on the network and retail wireless as you've come in with fresh eyes. What should we expect from this business this year? Are there things we're going to see through the course of 24?

Speaker Change: So let me let me answer your question in reverse.

Speaker Change: As Paul and I. Both mentioned, we're now looking to solve this maturity problems in a way that you will permanently be a drag on our business. We are trying to find solutions that are.

Hamid Akhavan: Either net ads or improving service gross margins or, you know, in the reported results that the market can see that this network that you say is, you know, excellent and ready to go, can translate into a business because, obviously, even if you raise capital to deal with the November maturities, there's more maturities, you know, down the line. And, and we sort of know the trend line in video. So this is really about building something real with boost.

Speaker Change: Permitting us to develop the business unit.

Speaker Change: And we can reach its full potential in a holistic way I mean, so that's the goal I mean, the opportunity is so unique here to be the first in the world to build the Oran, there's incredible amount of interest by all parties enterprises government.

Speaker Change: The defense community.

Speaker Change: Everybody is interested in making the great disagreed success plus the fact that we have all this satellite assets that can tie to it you know a directed device a bunch of other things. So I want to say that we will look at that and say no. We cannot let shortage of capital or limitations prevent us from making this business.

Hamid Akhavan: So maybe you can just set expectations for us. Or maybe the answer is, you know, given the cost cutting and free cash flow, this is not a year we should expect to see the business grow. Anyway, we'd love to hear your thoughts on that. And then I just had a follow up.

Speaker Change: <unk> full potential which is the reason I want to be here and I'm excited about it now well let me bring you up to the first part of your question, which was what are you going to do in 'twenty.

Hamid Akhavan: So let me answer your question in reverse. As Paul and I both mentioned, we're now looking to solve these maturity problems in a way that will permanently be a drag-on, allowing us to develop the business in a significant way and reach full potential in a holistic way. I mean, that's the goal.

2024, like any other new brand new mobile business that I have seen are launched and I had many of those.

Speaker Change: Is a transition year, where you get the business for success now any number that shows up upfront because of the small number here smallest number on it you know it could skew your model in a very.

Hamid Akhavan: I mean, the opportunity is so unique here, to be the first in the world to build the O-RAN. There's an incredible amount of interest by all parties, enterprises, and governments.

Speaker Change: Range way, it's not the year to build a model on and he's not the year that we want to put a a very static number yeah. You know this is a this is not a business on a steady state.

Hamid Akhavan: The Defense Community; everybody is interested in making this a great success. Plus the fact that we have all this satellite access that can tie to it, direct-to-device, and a bunch of other things. So I want to say that we look at that and say, no, we cannot let shortage of capital or limitations prevent us from making a difference, making this business reach its full potential, which is the reason I want to be here, signing. Now, what I want to bring you to the first part of your question, which was, "What are you going to do in 2024?". I see 2024, like any other new, brand new mobile business that I have seen Now, any number that shows up up front because of the small number here, small number, you know, it could skew your model in a very, you know, strange way.

Speaker Change: Go to market, we got to throw something out there we're going to be disrupted here there to see what works, sometimes you know put something in a market is not great and you you kind of reiterated it becomes great I'm really excited about like the one thing that I want to emphasize here and I stand behind the network is awesome. It is awesome I just cant Kansas.

Two how great. It is plus the fact that you've got the national roaming on the top of two other networks I mean, I just can't imagine anybody not seen that as a differentiator. It has never happened in the history of mobile never Nobody has had this never nobody has had national roaming and this is the first time and you know we.

Speaker Change: We would like to use that and I think that's it that's that removes all sorts of limitations from my perspective in terms of our go to market.

Speaker Change: But he is not the year that I can give you a static forecast. So please give me a year to figure out what which ends up and how we are you know are.

Hamid Akhavan: It's not the year to build a model on, and it's not the year that we want to put a very static number on it. You know, this is not a business in a steady state. You know, we're going to go to market, we're going to throw something out there, we're going to be disrupted here, there, to see what works. Sometimes, you know, putting something in the market is not great, and you kind of re-gear it, and it becomes great. I'm really excited about, like, the one thing that I want to emphasize here, and I stand behind: the network is awesome. It is awesome. I just can't speak to how great it is, plus the fact that you've got national roaming on top of two other networks. I mean, I just can't imagine anybody not seeing that as a differentiator. It has never happened in the history of mobile, never. Nobody has ever had national roaming.

Speaker Change: Going to maximize our.

Speaker Change: In market performance, but you're going to see installments I'm not I'm not also reducing expectation to the point that you're not going to see us at all this year. It's just not that you have to build a model on give me a year I'll help you build the model next year.

Speaker Change: Okay.

Speaker Change: And then I just was curious does that mentioned in the K I think that Theres a third test so does that still needs to be finalized for the 2023.

Speaker Change: Spectrum.

Speaker Change: You know a sort of FCC milestones that I think you have to I think it says you have to finish that drive test. This month, just want make sure that that's nothing we should be thinking about as a risk and then I was I was last week, just can I ask a bit of a random one hamid one of the partners that we've all focused.

Hamid Akhavan: It's the first time. And, you know, we like to use that, and I think that removes all sorts of limitations from my perspective in terms of our go-to-market strategy. But it's not the year that I can give you a static forecast, so please give me a year to figure out which end is up and how we are, you know, going to maximize our market performance. But you're going to see installments. I'm not also reducing expectations to the point that you're not going to see us at all this year. It's just not the year to build a model on.

Speaker Change: Over the years has been Amazon as it again with your fresh eyes, you know sort of surveying the relationship that that dish has anything you would call out there that you think is interesting or underappreciated or is that another one we shouldnt be thinking about much in 'twenty 'twenty four.

Speaker Change: This is John as it relates to the drive testing.

John Swearing: We're on track with that and we're getting ready to submit.

Speaker Change: I wouldn't put any extra risk factors on that.

Speaker Change: Okay beyond what we've already disclosed.

Hamid Akhavan: Give me a year. I'll help you build a model next year. Okay, and then I just was curious, there's a mention in the K, I think there's a third test sort of that still needs to be finalized for the 2023 spectrum, you know, sort of FCC milestones that I think you have to, I think it says you have to finish that drive test this month. Just want to make sure that that's not something we should be thinking about as a risk. And then I was, I was lastly, just gonna ask a bit of a random one, Hamid, one of the partners that we've all focused on over the years has been Amazon, and again, with your fresh eyes, you know, sort of surveying the relationships that that dish has, is there anything you would call out there that you think is interesting or underappreciated? Or is that another one we shouldn't be thinking about much in 2024? This is John. As it relates to the driving testing, we're on track with that, and we're getting ready to submit. I wouldn't put any extra risk factors on that.

Speaker Change: So comedy that Amazon, we see Amazon I see personally Amazon as a various.

Speaker Change: Various strategic partner and I think they see us the same way I don't want to speak on their behalf, but that's what we sense a b. We are excited about our work together I think that given us.

Incredible amount of attention and help and we are.

Speaker Change: We're working with them hand in glove and we are very excited about it I mean, we are jointly committed to making sure. The offerings that we have on Amazon meet the Amazon's experience, which I'd like to have like I like to have the Amazon experience not the mobile com.

Speaker Change: Online or or any other experience I mean, that's one of the goals, we have and we're not going to compromise on that and that's again another one of those things that I said, we want to make sure we get it right, but we have all the support we need from Arizona, So delighted with your relationship there.

Speaker Change: Very good thank you.

Speaker Change: Thank you so much.

Speaker Change: Our next question comes from the line of Tom <unk> with Citadel. Please proceed with your question.

Unknown Attendee: Okay. Okay. Okay. Okay. So, Covenant and Amazon, we see Amazon, I personally see Amazon as a very strategic partner, and I think they see us the same way. I don't want to speak on their behalf, but that's what we sense.

Unknown Attendee: Thank you for taking my call two years ago at the same call for the year and 'twenty, one Charlie talked about your abilities to be very mathematical.

Unknown Attendee: And.

Unknown Attendee: Network is built primarily for the enterprise and government solutions I was wondering if you could talk a little bit about where we have success there and what you see in the near future from that sensor we seem to be focused on the call here with consumer wireless.

Hamid Akhavan: We are excited about our work together. I think they've given us an incredible amount of attention and help, and we're working with them hand in glove, and we're very excited about it. I mean, we're jointly committed to making sure that the offerings that we have on Amazon meet the Amazon experience, which I'd like to have. Look, I'd like to have the Amazon experience, not the mobile, online, or any other experience.

Speaker Change: So let me this is not sure 100%, where there I won't hit the Mark in answering your question because it's a bit of a broad question, but.

You know, we see a great potential in our enterprise and part of that enterprise is the governments.

Hamid Akhavan: I mean, that's one of the goals we have, and we're not going to compromise on that. And that's, again, another one of those things that I said. We want to make sure we get it right, but we have all the support we need from Amazon. So, delighted with the relationship there. Very good relationship. Thank you so much.

Speaker Change: But at the Hughes.

Speaker Change: And now the broadband portion of our segment of our business at Echostar now, we do have a relationship with.

And in business with Department of Defense and government in multiple entities there.

Operator: Our next question comes from the line of Tom Ledtke with Citadel. Please proceed with your question. Thank you for taking the call.

Speaker Change: We see incredible opportunities there in fact, tying that opportunity to the five G, which we have demonstrated in a couple of places we demonstrated that in spades in a with the island and we've got a second base as a result of that and that's become a showcase. We also won an award from from some from the Governor.

Tom Ledtke: Two years ago, on the same call for the year-end 21, Charlie talked about your abilities to be very mathematical, and the network is built primarily for enterprise and government solutions. I was wondering if you could talk a little bit about where we have success there and what you see in the near future from that. We seem to be focused on the call here with Consumer Wireless. So let me tell you I'm not 100% sure whether I will hit the mark on answering your question because it's a bit of a broad question, but you know we see great potential in our enterprise, and part of that enterprise is the government.

Speaker Change: And do you know or keep project a $50 million.

Speaker Change: We see that there is significant amount of interest in the India D O D government.

Speaker Change: Enterprise related to that but I want to say that these things as you're well aware in the enterprise business.

Speaker Change: You work for quite a while before you get a monstrous contract you know Paul Gaskey mentioned in our and indeed.

Hamid Akhavan: But at Hughes and now the broadband portion of our segment of our business at EchoStar now, you know, we do have a relationship with and business with the Department of Defense and government in multiple entities there. We see incredible opportunities there, in fact, tying that opportunity to the 5G, which we have demonstrated in a couple of places. We demonstrated that at a space on Whitby Island, and we got a second base as a result of that, and that's become a showcase. We also won an award from the government, you know, an ORCID project of $50 million. We see that there's a significant amount of interest in the DOD, government, and enterprise related to that, but I want to say that these things, as you are well aware, in the enterprise, you work for quite a while before you get a monstrous contract. You know, Paul Gaske mentioned in his remarks that Delta Air Lines, we had a massive booking. That was in the works for a year and a half before you get something like that.

Speaker Change: His his remarks that the Delta Airlines you had massive.

Speaker Change: Booking Ah that wasn't a world where you don't have you know it takes it take before you get something like that but in the enterprise with what do you get at it it significantly overshadows anything you can do with the consumer so we're going to be focused on both I want to make sure that if you put those in in the in the shorter term, while we're working in parallel to develop our enterprise business Governor.

Speaker Change: The business make five G and Oran differentiator in that space, which it is you know we're going to feed ourselves using their consumers. So we're gonna do boss.

Speaker Change: And in the future will tell us how what the mix will be but we are excited about the enterprise opportunities.

Speaker Change: Operator, I think we'll take one more question before wrapping up.

Speaker Change: Thank you our final question will come from the line of Michael Rollins with Citi. Please proceed with your question.

Michael Ian Rollins: Thanks, I just wanted to follow up on some of the comments that you were making about.

Hamid Akhavan: But in the enterprise, when you get it, it significantly overshadows anything you can do as a consumer. So we're going to be focused on both. I want to make sure that people know, in the shorter term, while we're working in parallel to develop our enterprise business, and government business, make 5G and ORAN the differentiator in that space, which it is. We're going to feed ourselves using the consumer. So we're going to do both.

Michael Ian Rollins: The focus for the mobile business, creating a.

Michael Ian Rollins: Competitive offering.

Michael Ian Rollins: Are there multiple spectrum bands that Echostar holds that you now view are no longer necessary to that competitive commercial strategy.

Michael Ian Rollins: And can be monetized as part of this long term funding plan.

Michael Ian Rollins: And then the second thing just back to your earlier comments around the build requirements.

Michael Ian Rollins: Comments infer that you may want to ask for a delay from the FCC. So you can achieve some of the competitive and commercial.

Michael Ian Rollins: And the future will tell us what the mix will be, but we are excited about the enterprise opportunity. Operator, I think we'll take one more question before wrapping up. Thank you. Our final question will come from the line of Michael Rollins with Citi.

Michael Ian Rollins: Objectives that you were sharing with us previously.

Michael Ian Rollins: <unk>.

Michael Ian Rollins:

Michael Ian Rollins: So regarding the spectrum bands of spectrum bands are all different and you're going to need more of them over time as you grow you may not need all of them are Franz you may need them in different markets in different ways. You know every spectrum band has a you know it's a use that is.

Michael Ian Rollins: Please proceed with my question. Thanks. I just wanted to follow up, Hamid, on some of the comments that you were making about the focus of the mobile business on creating a competitive offering. Are there mobile spectrum bands that EchoStar holds?

Michael Ian Rollins: That is a specific to a certain need you make them at certain times. So I I cannot give you a specific answer you know what is fixed when we're going to need at one point, but they all will come useful at some stage in your life and other business and ultimately when you are when.

Hamid Akhavan: that you now view are no longer necessary to that competitive commercial strategy and can be monetized as part of this long-term funding plan. And then, just back to your earlier comments around the build requirement. Do those comments infer that you may want to ask for a delay from the FCC so you can achieve some of the competitive and commercial objectives that you were sharing with us previously?

Michael Ian Rollins: When you are I don't know 50 years into the business, you're going to need every spectrum as bad in every geography, but on the way there you have plenty of flexibility to adjust your spectrum in a way that best is monetize for you at that stage in your life. So I don't find myself.

Hamid Akhavan: Thanks. So, regarding the spectrum band, you know, spectrum bands are all different and you're going to need more of them over time as you grow, you may not need all of them up front, you may need them in different markets in different ways. You know, every spectrum band has, you know, a use that is, you know, that is specific to a certain need you may have at a certain time. So, I cannot give you a specific answer, you know, what spectrum we're going to need at one point, but they all will come useful at some stage in your life of a business and ultimately when you are, I don't know, 50 years into the business you're going to need every spectrum band in every geography, but on the way there you have plenty of flexibility to adjust your spectrum in a way that best is monetized for you at that stage in your life.

Michael Ian Rollins: Position, we don't find ourselves in a position that we are tied to very specific recipe of.

Michael Ian Rollins: Ownership of the spectrum that make us maybe we can they can be successful in many many ways using the spectrum, we have and we have plenty of spectrum far more than I need at this moment. So we all good as it comes to our interactions with the FCC you know I generally don't like to comment on any activities regarding the FCC, we take all of our.

Michael Ian Rollins: Obligations very seriously and intend to meet every one of our obligations.

Speaker Change: But I I refrain from making any comments detailed comments regarding the FCC for obvious reasons.

Speaker Change: So can you just don't want that.

Hamid Akhavan: So, I don't find myself in a position, we don't find ourselves in a position that we are tied to a very specific recipe of ownership of the spectrum that makes us. We can be successful in many, many ways using the spectrum we have, and we have plenty of spectrum, far more than I need at this moment. So, we are good. As it comes to our interactions with the FCC, you know, I generally don't like to comment on any activities regarding the FCC. You know, we take all of our applications very seriously and intend to meet every one of our obligations. But I will refrain from making any comments. So, oh my God.

Speaker Change: Oh, if I could just one last one and just given that in terms of what you. Just described on the commitments can you just give us an update of.

Speaker Change: Just assuming that you have the funding.

Speaker Change: How many more sites and how much more in terms of dollars is needed do you believe satisfy all the requirements and just put this whole question behind you.

Speaker Change: Yes, well, we don't disclose that but we will have ample capital to hit the requirements. If we're able to raise money. So yeah. As you know you could build the sites in many different ways you can build sites for capacity in Statesville coverage is always it's always it's really not it's more of an art than the science. So our engineers would have to look at that in it.

Paul Orban: Oh, if I could, just one last one. And just given that, in terms of what you just described in the commitment, can you just give us an update? Yo.

Speaker Change: That'd be said it doesn't really make sense to put a number out there, but but but as Paul said you know we are we have enough resources. We would have you would have enough resources to.

Hamid Akhavan: Assuming that you have the funding, how many more sites and how much more in terms of dollars are needed? I believe I can satisfy all your requirements, your whole question box. Yeah, we don't disclose that. But we will have ample capital to hit the requirements. And, as you know, you can build sites in many different ways. You build sites for capacity, you build sites for coverage, all kinds of ways to do that. So it's really not, it's more of an art than a science, so our engineers would have to look at that, and for that reason, it doesn't really make sense to put a number out there.

Speaker Change: To meet that obligation I want to thank everyone for participation I think we had a different format. We took some time upfront.

But I hopefully that time was useful to answer some of these questions. So if you're a Q&A did not have to be as long.

Speaker Change: With that thank you very much and hopefully we see you on the next the next earnings call.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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Speaker Change: Yeah.

Speaker Change: Uh-huh.

Speaker Change: Mhm.

Hamid Akhavan: But as Paul said, we have enough resources; we would have enough resources to meet that obligation. I want to thank everyone for their participation. I think we had a different format; we took some time up front, but hopefully, that time was useful to answer some of these questions, so the Q&A did not have to be as long. With that, thank you very much, and hopefully, we will see you on the next earnings call. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Logo, Rooting Gun Careers. Thanks for watching! beproud.frog beproud.frog bird beproud.frog, Interesting information? Pass. Thank you for watching. Unknown Speaker 00.00.00.00 Unknown Speaker 00.00.00.00 Thanks for watching! Please like, comment, and subscribe! Thanks! Honk, honk, honk, honk, honk.

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