Q1 2025 EchoStar Corp Earnings Call
We'll go and optimization in recognition of our network performance are key factors in this success.
In the first quarter, we expanded the benefits of our prepaid and postpaid offerings to both our branded stores and digital sales channels and built up on gains in combining our services under the single boost more brands. We also increased our marketing spend and offers during the important tax return window, which sees.
Lead increases demand for new devices and upgrades.
These activities helped to anchor our first quarter subscriber growth and positions us well for additional opportunities in 2025.
As a testament to our excellent network experience in.
And competitive mix of offers in the quarter, we increased our wireless subscribers to approximately 715 million, while improving the quality of our subscriber base as evidenced by seven 2% improvement in churn year over year and an increase in <unk>.
Overall, we are satisfied with what we have managed to achieve over the past year and will continue to focus on profitable subscriber additions.
Furthermore, in light of recent economic uncertainty, we believe we have some of the most attractive offers in the market for consumers looking to capture the best value in the mobile business.
In our Hughes business, we continue our progress in the enterprise domain, our in flight connectivity business recently announced universal compatibility of our terminals in the K and Ku bands do.
Compatibility means our airline customers are not limited to one constellation, enabling cost effectiveness flexibility and optimal passenger experience. You also recently announced membership in the Airbus HBC plus program, which gives us the ability to serve airlines with a line fit option at <unk>.
Bus factory. These developments in addition to our expanded contracts for regional and wide body aircraft with Delta Airlines add to our in flight product offerings and increase our backlog.
In Q1, we began commercial shipments of our new single tenant version of our electronically as suitable Leo antenna.
Cost effective high performance addition to the use of terminal family is uniquely suited for global enterprise use due to its size weight and ease of installation.
We have signed contracts from customers in Europe, and India for our SD Wan and AI ops capabilities in Latin America with finished deploying our multi orbit managed network to support private networks and security services on Leo and Geo satellites and secured additional demand for similar services for Brazilian National Parks.
Finally, our Hughes consumer business, we closed Q1 with over 850000 broadband subscribers.
In Q1, the performance of our pay TV business, consisting of dish and sling was in line with our expectations.
Each business and media sales performed well and we delivered roughly 7% growth in OIBDA per subscriber.
Despite macro headwinds in the pay TV landscape, we remain focused on acquiring and retaining the most profitable subscribers that value our service offerings are.
Our video segment remain focused on operational efficiency.
Loyalty and improving user experiences. These efforts helped increase <unk> and reduce non programming valuable cost per subscriber.
This work will serve us well in the remainder of 2025 as we introduced new offerings to meet evolving consumer demands and expand our cross sell opportunities with boost mobile.
Dish TV finished the quarter with approximately $5 5 million subscribers and churn was 136% compared to 153% a reduction of 11% for the same period of 2024.
Lower year over year churn is a result of our data driven loyalty initiatives and bundled offers.
<unk> TV churn is now at the lowest level in over a decade, excluding the pandemic.
We also drove pay TV <unk> growth with a year over year increase of over $3 or 3% due to the full effect of 2020 for price increases.
Also in spite of competitive headwinds in extremely market, we closed the first quarter with $1 9 million sling subscribers.
Paul Wogan: Now I would like to turn it over to Paul Wogan for commentary and color on the numbers.
Paul Wogan: Thank you if I may.
Paul Wogan: Revenue was approximately $3 9 billion in the first quarter, that's down three 6% year over year, primarily due to fewer subscribers at pay TV <unk>, partially offset by an increase in revenue from our wireless segment, driven by <unk> growth and higher handset sales.
Paul Wogan: OIBDA was quarter 1 million in the first quarter, a decrease of $70 million year over year or approximately 15% of.
Paul Wogan: The decrease in OIBDA was primarily driven by increased marketing and wireless as well as decreased OIBDA from our pay TV segment due to fewer subscribers.
Paul Wogan: Echostar generated positive operating free cash flow of $77 million in the quarter defined as free cash flow before debt service payments and nonoperating capex related to Echostar 25.
Paul Wogan: We continue to expect positive operating free cash flow in 2025, as we remain disciplined in managing our operating cost structure, while growing our wireless and Hughes enterprise businesses.
Paul Wogan: Free cash flow, including debt service in the first quarter was negative 170 $172 million, an improvement of $55 million compared to the prior year.
Paul Wogan: This improvement was driven by a $299 million reduction in capital expenditures, including capitalized interest primarily due to optimizing our <unk> network spend partly offset by lower cash flow from operating activities.
Paul Wogan: At the end of the first quarter, our total cash and marketable securities was $5 4 billion.
Paul Wogan: A decrease of $464 million compared to year end.
Paul Wogan: This decrease primarily resulted from capital expenditures of $378 million, including capitalized interest.
Paul Wogan: And repurchases of redemptions of our near term maturities.
Paul Wogan: Partially offset by cash generated from operating activities of $207 million.
Paul Wogan: Today, we received $150 million from an add on issuance to our tenants every quarter senior secured notes from a privately negotiated transaction.
Paul Wogan: Turning to our segment performance.
Paul Wogan: Total wireless revenue in Q1 increased by six 4% to $973 million driven by three 3% ARPA growth and higher handset sales.
Paul Wogan: Service revenue grew two 7% in Q1 sequentially.
Paul Wogan: Accelerated from one 3% in Q4.
Paul Wogan: Due to increased subscriber activations, the wireless OIBDA loss increased to a negative $415 million compared to negative $363 million last year.
Paul Wogan: Pay TV revenue decreased by six 9% to $2 5 billion due to a lower average pay TV subscriber base.
Paul Wogan: Partially offset by increased.
Paul Wogan: Pay TV <unk>.
Paul Wogan: Pay TV OIBDA decreased to $730 million from $736 million, while pay TV <unk> per subscriber increased six 8% year over year due to lower average pay TV subscriber base.
Paul Wogan: Partially offset by lower subscriber acquisition costs from fewer gross activations and lower personnel costs.
Paul Wogan: We continue to focus on retaining profitable customers and remain disciplined in our cost structure.
Paul Wogan: Broadband and satellite services our BFS.
Paul Wogan: Revenue decreased by three 1% to $371 million due to lower sales of broadband services to consumers and enterprise customers.
Partially offset by higher hardware sales to enterprise customers.
Paul Wogan: We remain focused in the near term on accelerating our enterprise revenue in order to return this segment to profitable revenue growth.
Paul Wogan: DSS OIBDA increased by eight 1% to $86 million from $79 million in the prior year due to lower SG&A, including a decline in bad debt expense.
Paul Wogan: With that I'd like to hand, it over to John to cover our network deployment progress.
John: Thank you Paul.
Speaker Change: We are in the worldwide leader in developing and operationalize them a cloud native open ran <unk> network.
Speaker Change: And today to boost mobile network provides fiber broadband coverage to over 80% of U S population.
Speaker Change: In combination with our partner networks, we are offering customers, 99% coverage across the U S.
Speaker Change: I'm also pleased to announce we have already met our June 14th FCC requirement by deploying three GBP 17, a key enabler for five advanced across our network.
Speaker Change: Also we now have more than $24 five <unk> sites on air more than one month prior to our commitment date.
Speaker Change: These network enhancements further demonstrate our commitment to scaling our network and giving boost mobile customers access to the latest technology.
Speaker Change: As we have expanded and optimize the network. We've continued to drive a competitive customer experience and we're outperforming the competition in many markets.
Speaker Change: During the first quarter, we invested $164 million in capex compared to $391 million in Q1 of 2024 as we continued to transition from the initial build out of our network to running optimizing and monetizing it.
Speaker Change: A key priority for us continues to be migrating as much traffic as possible to our owned and operated <unk> network.
Speaker Change: Our purified <unk> experience to our customers and reap the benefits of owner economics.
Speaker Change: Today, we have over one 5 million customers on net and our loading more than 75% of compatible devices on our network and the accelerated markets.
Speaker Change: We continue to focus on activating an increasing percentage of new customers directly on the boost mobile network as well as upgrading existing customers to our growing portfolio of boost mobile network compatible devices.
Speaker Change: Just last month, we expanded our device portfolio to include iPad, an Apple watch with Android options in the near term pipeline.
Speaker Change: We will continue to ramp up our progress throughout the year. In addition, we look forward to working with the FCC to increase GPRS power levels through its pending rulemaking.
Speaker Change: We see this as a key step to improving spectral efficiency increase.
Speaker Change: <unk> utilization of this band and aligning the U S with the rest of the world.
Speaker Change: Now I'd like to turn it back to the need for few short closing comments.
Speaker Change: Thank you John we are pleased with the performance of our business lines from the first quarter.
Speaker Change: Sure.
Speaker Change: In summary, our 2025 operating plan targets, a positive operating free cash flow optimize subscriber profitability from our pay TV segment expansion of use enterprise and continued growth from boost mobile.
Speaker Change: With that we'll open up for Q&A from the analyst community.
Speaker Change: Thank you and at this time, we will conduct a question and answer session.
Speaker Change: I would 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.
Speaker Change: You May press Star two if you would like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Once again to ask a question press star one on your telephone keypad will pause for a moment to poll for questions.
And our first question comes from Sebastiano Petti with Jpmorgan Chase <unk> Company. Please state your question.
Sebastiano Petti: Hi, Thank you for taking the question strong subscriber results in wireless but success based Opex is pressuring EBITDA in this segment there.
Sebastiano Petti: While you are making progress bringing customers on net.
Sebastiano Petti: Any help.
Sebastiano Petti: Thinking about what some of the other potential cost levers could be within that segment as we think about the glide path too.
Sebastiano Petti: Improved EBITDA drag there and then just another broader term kind of question.
Sebastiano Petti: Help us think about maybe perhaps here Leo low Earth orbit strategy launching some satellites, but how do you see this fitting within your broader product suite in terms of not only perhaps on the <unk> side and wireless but also some of your enterprise effort. Thank you.
Sebastiano Petti: Great.
Sebastiano Petti: Thanks for the question is the two year.
Sebastiano Petti: I'll take the first one.
Sebastiano Petti: Maybe John can add to it.
Sebastiano Petti: So in terms of improving the economics of them.
Sebastiano Petti: New subscribers coming on.
Sebastiano Petti: I think the first thing is we are adding now.
Sebastiano Petti: The significant majority of our customers directly on net.
I think having the owner economics of having our customers be on our own <unk> network is probably one of the biggest improvements we've been making costs and you see that trend will continue.
Sebastiano Petti:
Sebastiano Petti: So I think about 75% of the customers being added now that come directly on net and John you May want to correct me on that one.
John: I don't know if the right number.
John: Yeah. Thanks, Amit that's with respect to the compatible devices. So one of the things that we're doing sebastiano. Thanks for the question is making sure when we have a handset that is in a market that's open for <unk>.
Speaker Change: That we're batting a very high percentage of that getting that device on net.
Speaker Change: We see that expanding in the back half of the year as the higher number of our devices that were distributing are compatible with the network just to give you a feel for the good example would be additional compounded Wi phones with 15, and 16 to 16 EPS relative to what we've been previously distributing that's been non compatible.
Speaker Change: On top of that.
Speaker Change: We have a lot of opportunities for upgrades of existing customers onto compatible devices. So you should see those numbers expand in the back half of the year.
Speaker Change: And going forward in.
Speaker Change: In addition to that with overall opex.
Speaker Change: Certainly focused where we have the biggest opportunity to win.
Speaker Change: You'll see us in the major markets, where we've got strong network, making sure that we're building our business to local efforts there.
Speaker Change: Back to you immediately.
Speaker Change: And then we also have working certainly not anything to report today in this earnings call, but we are working on a number of different <unk>.
Speaker Change: Our fundamental initiatives around distribution and how we go to market.
Speaker Change: In routes that maybe more.
Speaker Change: Value enhancing and less expensive so.
Speaker Change: More efficient so those would show up starting back half of the year and into 26 B certainly are not.
Speaker Change: On the.
Speaker Change: Focused on daily optimization of the business, but also we're looking at long term trends of how we can.
Speaker Change: Changed economics fundamentally so more to come on that one as the year progresses.
Speaker Change: Couple of few quarters from now on the legal business. We have been hard at work. We are one of those companies don't make too many announcements.
Speaker Change: We don't have any without a substance we don't think that plenty of market, making that we don't need to participate in that but we certainly have been very busy in terms of getting our.
Speaker Change: Plans are D and engineering ready and.
Speaker Change: We will make announcements when we feel it's appropriate.
Speaker Change: But we certainly intend to be in the market as the leading provider of global direct to device connectivity using our S band rights internationally and AWS four domestically.
Speaker Change: We are.
Speaker Change: Very much focused on it.
Speaker Change: It is it is a priority for US is one of the most important strategic priorities in terms of.
Speaker Change: Business development.
Speaker Change: In.
Speaker Change: We just don't include that in our prepared remarks simply because we don't think is in our best interest to speak.
Speaker Change: Speak today until we have more substance to deliver to the market.
Speaker Change: That makes sense and then if I could one follow up maybe for Paul but wherever the Leo asset sit under Echostar outside of Hughes are at Hughes somewhere else any color on how to think about that.
Speaker Change: Okay.
Speaker Change: Lille assets outside of Hughes.
Speaker Change: We don't really have.
Speaker Change: A small asset and IRA.
Speaker Change: That's our theory on assets that would be I think that still does that.
Speaker Change: Echostar level is that you wanted to add.
Speaker Change: Assets are at at the parent level and the investments we've been making.
We have not obviously disclose any of this but.
Speaker Change: I don't believe that we will put those assets in.
Speaker Change: And he was I think we would keep the assets at the at SaaS level with the investments that we would make going forward on the <unk> site.
Speaker Change: Makes sense. Thank you very much.
Speaker Change: Great.
Speaker Change: And your next question comes from.
Speaker Change: Rick Prentiss with Raymond James Please state your question.
Speaker Change: Hey, Thanks, everyone. This is Brent pentair on for Rick.
Speaker Change: First question as you've continued to ramp net adds in wireless.
Speaker Change: Would you say is resonating most in the market, that's helping you build that momentum.
Speaker Change: Specifically.
Speaker Change: And given <unk>.
Speaker Change: Seasonally slow periods typically is it right to think you should be able to improve further from this $1 50 level.
Speaker Change: Onto the first part of the question look we hope we have some of the most attractive offers in the market.
Speaker Change: In spite of the.
Speaker Change: Headlines that everybody else has in terms of having their.
Speaker Change: Offers be in.
Speaker Change: Best in the market are unique in the market in terms of value when you look at the.
Speaker Change: Actual details of what is included and what is not.
Speaker Change: Sure.
Speaker Change: As it turns out to be the best value and there are some hidden cost and heating requirements and everybody else's offers in a way that when people ultimately unpack and managed to unpack all of that.
Speaker Change: All the nuances that each offer includes they realize that our offers are.
Speaker Change: Very attractive.
Speaker Change: The other thing is that we also benefited from a significant reduction in churn as I mentioned in my prepared remarks.
Speaker Change: The we see we retained customers in a more significant way, which helps us with a net app. That's a testament to the great network that we have and also our contributions from digital sales is now very significant.
Speaker Change: So we did not have done in the past at least mobile historically been at.
Speaker Change: Indirect branded shop sales, but now we've seen a very significant contribution from the digital channel.
Speaker Change: I would not unknown to the second part of your question I would not label. The first quarter is historically low for us that is not true.
Speaker Change: Tax season has always been a very good season for us simply because.
Speaker Change: The younger value conscious segmenting, a market that has been our bread and butter and continues to be our focus.
Speaker Change: Always.
Speaker Change: Use the tax return opportunity to upgrade their mobile devices and services and we so we consider first quarter actually one of the more productive quarters for us I will not make any forward statements about our projections for the second quarter, but I would say that our goal for the year is to deliver positive.
Good adds for the rest of it every quarter going forward were not going to look back in terms of growth.
Speaker Change: Any longer.
Speaker Change: On a growth pattern, we're not going to look back so.
Speaker Change: Can make you can give you a definitive statement about our performance.
Speaker Change: Every quarter will be good seasonality will definitely play a role in the first quarter is usually a good quarter for us.
Speaker Change: Got it and then one more.
Speaker Change: In the 10-Q, you all noted Capex should drop and then it sounds like it will increase again as you move toward your build out deadline, how should we think about the timing of when youll need to ramp.
Speaker Change: Capex again to meet those deadlines.
Speaker Change: That is accurate there.
Speaker Change: Youll see capex lower than 25% and we've shown you in 2024 and it will ramp up as our deadlines approach. However.
Speaker Change: Given the milestones that we've met recently the 2026 deadline that we have more than likely will be pushed out to future years. So we will move to more of a success based builds meaning when you look at the <unk> roaming costs that we pay for a tower and the operating cost of those.
Speaker Change: Can you just kind of goes back in today's dollars and it costs more than what it cost to build a tower, we're going to build those towers. So it's going to ebb and flow based on where subscribers are at and what the need is.
Speaker Change: Got it thank you.
Speaker Change: Your next question comes from Marlene Pereira with Banc of America Securities. Please state your question.
Speaker Change: Great. Thank you for taking my question.
Speaker Change: I just wanted to ask on Hughes on the bonds specifically.
Speaker Change: I saw that you repurchased some of your Hughes secured bonds. Due next year and you also issued $150 million of the new spectrum notes. So I just wanted to be clear that those are those two.
Speaker Change: Ladies and also.
Speaker Change: Do you have some other uses for proceeds.
Speaker Change: The incremental capacity on the spectrum notes.
Speaker Change: Or are you thinking about utilizing that and do you expect to continue repurchasing bonds.
Speaker Change: Thank you Mike for questions.
Speaker Change: The fee.
Paul Wogan: We obviously as you know as as Paul has mentioned we are sitting on a significant amount of cash on balance sheet.
Speaker Change: As a result of the.
Speaker Change: Financing, we had a few months back we need to put that cash to use.
Speaker Change: And one of the best uses of cash for US is some of our own securities that are in the market.
Speaker Change: These these are undervalued securities and when we look at it we will.
Speaker Change: We diversify our investments for sure we're not concentrating on any single source, but when we look at where we get the highest return with the lowest risk one of those areas is buying our own.
Speaker Change: Paul decided to do.
Speaker Change: It's not a very significant amount so it doesn't really move the needle in terms of our overall financials, but certainly is part of the basket of.
Speaker Change: <unk> Securities that Paul is investing in the short term and.
Speaker Change: The benefit from.
Speaker Change: The second part of the question had to do with the 150 million raised I believe.
Speaker Change: Sale of additional central Bank bonds that we also had in there and that's an obligation we have had to a party that needed to.
Speaker Change: But we need to satisfy we had committed to.
Speaker Change: For some additional bonds.
Speaker Change: Issue some additional bonds.
Speaker Change: <unk> had been due for many months and we just on a debt obligation. There is a lot of demand for that security that for that for that for that bond and b.
Speaker Change: We just wanted to make sure that we meet that obligation there was nothing else will do it yes unrelated.
Speaker Change: Got it great and then just on the buyback on the bonds.
Speaker Change: Why not be unsecured.
Karen: This is Karen.
Speaker Change: There was no there was no particular reason for it.
Speaker Change: We may be selling those bonds Bank example, who knows and so we I think that was a decision that was made I don't think you should read anything into it in terms of secured versus unsecured.
Speaker Change: Got it and one more if I could.
Speaker Change: Is there any update that you can provide on the status of the litigation with UBS bondholders.
Speaker Change: There were reports earlier this week.
Speaker Change: <unk> could possibly be appointed so just wondering if you know.
Speaker Change: It may be that might signal there could be room for a settlement with bondholders.
Speaker Change: Or even reopened the door for discussions with EQT.
Speaker Change: Right No. We don't we don't have comment on that litigation.
Speaker Change: Great. Thank you very much that was helpful.
Speaker Change: Okay.
Speaker Change: And your next question comes from Walter <unk> with <unk>. Please state your question.
Speaker Change: Thanks.
Speaker Change: Talk about what investments, we're going to make them.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: You're breaking up a bit because you just.
Speaker Change: To repeat your question or pick up the handset.
Speaker Change: Alright.
Speaker Change: It may come back.
Speaker Change: Okay Nicole.
Speaker Change: Hi, Jeff.
Speaker Change: Alright.
Speaker Change: Okay.
Speaker Change: Thank you.
Your next question comes from Bryan Kraft with Deutsche Bank. Please state your question.
Bryan Kraft: Good morning.
Bryan Kraft: Couple of wireless questions.
Bryan Kraft: I guess first I was wondering if you could just provide any color on where the news the new boost customers are primarily coming from.
Bryan Kraft: Secondly, I wanted to ask you about your ability to utilize third party financing to fund handset subsidies any IP working capital usage. So you don't have to use your own cash flow to fund them and obviously allow you to grow faster. So I just wanted to see where you are on that and then lastly, I guess.
Bryan Kraft: So I just wanted to ask are you are you looking at any opportunities to partner with other wireless operators and jointly building out any of your spectrum bands.
A way of maybe doing it in a more capital light way.
Bryan Kraft: And then also if you're open to either selling or leasing maybe some pieces of the spectrum that you have to other operators.
Bryan Kraft: Where he might not be using it and could use to generate some additional cash flow or.
Bryan Kraft: Or if it's sold bring capital in thank you.
Bryan Kraft: The three different questions I'll try to remember all and parse them out.
Bryan Kraft: The first question is are we getting customers across all from from all of the three other players in the market.
Bryan Kraft: Global.
Bryan Kraft: Particularly pleased with the fact that we're getting some of the better customers because our <unk> on prepaid to our understanding is highest in the market today, we have the highest prepaid <unk> is rising and it has been historically the highest has been.
Bryan Kraft: And we have had historically lowest churn known in prepaid and very competitive with the best in the market.
Bryan Kraft: Churn from the others.
Speaker Change: He points out that we are getting better a good cohort of subscribers were not getting subscribers that don't have any other options.
Speaker Change: <unk> is a testament to the fact that the value overall.
Speaker Change: Is.
Speaker Change: Yes.
Speaker Change: It is considered the best.
Speaker Change: <unk>.
Speaker Change: Dave.
Speaker Change: We are actually getting net positive.
Speaker Change: Porting by a significant amount last year, we mentioned that beginning of the year we were.
Speaker Change: Net ports out at the beginning of 2024 by end of 2024, we were completely hedge adjusted situation monthly.
Speaker Change: Three month, we got the Port <unk> got significant.
Speaker Change: And today, we have.
Speaker Change: The higher Port <unk> Port Allen, but very significant amount, obviously in reporting that which again Testament is a testament to customers are recognizing the boost mobile's network and value.
Speaker Change: The best in the market.
Speaker Change: When it comes to.
Speaker Change: Yeah.
Speaker Change: I guess device financing outside of our own capital Paul maybe you can take that piece yes.
Paul Wogan: We definitely have access to various device finance partners, we first want to use our own cash on balance sheet, but that may change over time, if we feel it's strategic for us and we'll be obviously opportunistic in that marketplace.
Speaker Change: And as it comes to spectrum.
Paul Wogan: Look we generally don't comment on about any any sort of spectrum related.
Speaker Change: Our trading of assets, that's not appropriate for the earnings call here.
Speaker Change: You always have every option available to us.
Speaker Change: <unk>.
Speaker Change: At the moment, we feel very comfortable where we sit in terms of our spectrum ownership is a few things in a market that FCC's, considering that would even enhance our position such as enhancing.
Power level on Cbre's, which would be vastly.
Speaker Change: Attractive to us and so.
Speaker Change: We believe this.
Speaker Change: Several ways for us to raise capital and be in half.
Speaker Change: Enough resources to be and remain competitive in the market.
Speaker Change: And so we're not closing doors on anything, but certainly im not here to discuss any sort of M&A or trading the.
Speaker Change: Spectrum.
Speaker Change: Thanks, if I could ask just one quick follow up could you provide any color on the prepaid versus postpaid mix of of the new connects.
Speaker Change: Yes look we I wanted to start by saying that responding to that by saying, we actually have stated and we are continue and you will see us even accelerate.
Speaker Change: What we call merger or <unk> of postpaid and prepaid I think the concept of post versus prepaid is a 50 year old concept that is no longer has significant value.
Speaker Change: When you're talking about how much people pay upfront versus how much phebe.
Speaker Change: <unk>.
Speaker Change: At that time.
Speaker Change: So great scale of payment and credit ratings is something that we are focused on and we will eliminate and we are well down the path of doing that having said that as therefore as a result of that it doesn't make sense for us to talk about prepaid postpaid as we are working very hard and Youll see us.
Speaker Change: Duties in the next couple of few quarters, we eliminate the cost of the prepaid postpaid entirely but just to answer your question because there may be a curiosity about what hasnt been in the past historical if I look at today, if I look at first quarter.
Speaker Change: The traditional definition of.
Speaker Change: Postpaid I would say roughly one third of net adds in the first quarter were postpaid net adds.
Just about just about one third was postpaid.
Speaker Change: Of the 100, if you thank you very much.
Speaker Change: Understood. Thank you.
Okay.
Speaker Change: Thank you and our next question comes from Walter <unk> with <unk>. Please state your question.
Speaker Change: I think that was not my technical buyer.
Speaker Change: I think the message.
Speaker Change: Can you talk about without I know you don't want to give up any like competitive dynamics.
Speaker Change: As we progress through 2025.
Speaker Change: Is there a willingness to invest in more distribution more advertising.
Speaker Change: To kind of get.
Speaker Change: The panel.
Speaker Change: I'm thinking also about Comcast it certainly feels.
Feels like after they call Garner there was a lot of confirm that one partner with getting away from the line for a year.
Speaker Change: Didn't work for Brian.
Speaker Change: How many years ago, they give away free online for a year. They converted a lot of those paying customer charter Comcast is now replicating that.
Speaker Change: And plan to be aggressive.
Speaker Change: Not to ask but youre going to do pre line, but are you is there a kind of a plan now that you've kind of gotten over the hump of positive net adds and it looks like youre going to be net adds for the next couple of quarters churn is obviously.
Speaker Change: Much more now.
Speaker Change: Now like I would think that you are now.
Speaker Change: Now consider next step in terms of investment for growth.
Speaker Change: I can speak to that at all.
Speaker Change: Terms of what's the game plan is here.
Speaker Change: Well, so yes, absolutely listen we.
Speaker Change: Nothing that we have delivered to date has been accidental in the sense that we formed a lot of foundation in 'twenty four.
Speaker Change: 24.
Speaker Change: After 'twenty one looks like.
Speaker Change: Fixing the basics I'm, putting the foundation to get the good customers to get value.
Speaker Change: Customers that are higher and at a value conscious is coming to us and you see the result of that today and we are very pleased and proud of what we've done we are working on additional distribution channel digital has already as I mentioned has become a very significant contributor to our net adds of the quarter.
Speaker Change: And <unk> seen us even at.
Speaker Change: Traditionally people have been referring to us.
Speaker Change: As postpaid now we are increasing we will be increasing our routes to market. We are working on fundamental ways from from a digital side from a national retail side.
From.
Speaker Change: From other <unk>.
Speaker Change: Non traditional distribution methods.
Speaker Change: That required significant amount of in house development and business development before we.
Speaker Change: Actually surfacing in the market.
Speaker Change: I think you have touched on something important and that is routes to market and axis, where people can buy from us and how we deliver the service and products to them I think that's the key focus areas for us.
Speaker Change: I can only comment to this level and just say that yes more to come I am not promising that necessarily in the very very immediate for instance, this quarter, but but if not it certainly is not too far and we will you will see the results of that.
Speaker Change: Towards the end of 2000 this.
Speaker Change: This year and beyond.
Speaker Change: The second question is.
Speaker Change: Downplays the impact that.
Speaker Change: The kind of moving on in the Verizon contract that they have have on that going forward. However.
Speaker Change: Brexit under that contract only.
Speaker Change: Perfect.
Speaker Change: Maybe there was an opportunity for them to go.
Speaker Change: The customers that they don't currently have given that they are losing broadband customers.
Speaker Change: Whats your viewpoint on are willing now to doing a deal with them and I guess more importantly.
Speaker Change: If you did an <unk> deal with them do they get the benefit of that.
Speaker Change: In fact, the customer get the benefit of not only your network, but the ability of those customers to then roam onto your your AT&T and T mobile roaming partner.
Speaker Change: Yes.
Speaker Change: I cannot comment about comcast's intentions, and what might be best for them, obviously only they can comment on that.
Speaker Change: I can comment about our ability and willingness to partner.
Speaker Change: We are going to look at every opportunity.
Speaker Change: That comes our way.
We are not.
Speaker Change: Close minded to any sort of partnerships we.
Speaker Change: We have demonstrated that globally in many ways or other parts of business. We're doing that today with content providers, we were happy to do that on our mobile business with anybody in our wholesale business. There are some discussions that would have to happen obviously with.
Speaker Change: Our roaming partners, we cannot do this unilaterally without their support.
Speaker Change: But if the economics of a deal.
Speaker Change: As such that is conducive to value enhancing to everyone. I think we would be working we'd be willing to consider and capitalize any any discussions.
Speaker Change: I, absolutely do not want to comment to imply in any way that we are.
Speaker Change: Discussing Aegean with Comcast or we are approaching Comcast.
Speaker Change: I want to be on the record that I am not commenting in any way about.
Speaker Change: This is just a speculation you asked me.
Speaker Change: You asked me a question about Comcast and I, just referred to it but I certainly don't want any.
Speaker Change: Any implications that we are.
Speaker Change: Working with Comcast on anything.
Speaker Change: Does that work on the ATM.
Speaker Change: We're able to do something with them.
Speaker Change: Our customers to be able to them.
Speaker Change: Why is the roaming relationships that you already have with AT&T and T mobile.
Speaker Change: Technologically yesterday Walters, John technologically, yes, their solutions and batch there, but it would come down new business deal.
Speaker Change: What does AT&T T mobile.
Speaker Change: I am doing a path for a deal like that.
Speaker Change: Yes, I think we've sort of already answered that it would require cooperation from all parties to advance any wholesale relationships.
Speaker Change: Got it thank you.
Speaker Change: And your next question comes from Adam Roads with Okta. Please state your question.
Adam Roads: Hi, everyone. Thanks for taking the question.
Adam Roads: You already touched on it briefly but directly devices certainly become more mainstream topic. So a couple of years ago. When you announced the echostar dish combination each of the companies SPM assets.
Adam Roads: The significant rationale for the transaction.
Can you provide any color on how echostar is unique positioning.
Adam Roads: A co operator of terrestrial and satellite networks to differentiate and benefits compared with others in the space.
Adam Roads: Yeah. So thank.
Speaker Change: Thank you for the question.
Adam Roads: <unk>, we have almost every.
Adam Roads: We check every box studies required to make.
Adam Roads: The number one strategic play there.
Adam Roads: Most important of all.
Adam Roads: We do have the the same spectrum and rights to a trust really and space to make it work and obviously you know our spend rates globally.
Adam Roads: <unk>.
Adam Roads: Level authorization and then on the U S. Obviously U S. We have the AWS for all of that is so if we don't have to work with anybody else. We don't have to find many other parties too.
Adam Roads: To collaborate with us to.
Adam Roads: Complement to complete that this picture in picture in our spectrum is not utilized in a way that we have to clean it cleared like other bands L band and other bands have to do so anyway, I think that that.
Adam Roads: Highways paved and ready for us, but in addition to that we have two other things that.
Adam Roads: Very almost nobody else has we are both as satellite operator manufacturer technology provider.
Adam Roads: As you have known.
Adam Roads: Our comments on Hughes and we are a key supplier to one web and we have been a supplier to other legal systems in the past our global stars and others. So we are.
Adam Roads: Well positioned from.
Adam Roads: The space perspective, and then we also have <unk> national provider the largest <unk> provider in the world practically now.
Adam Roads: Partnership and roaming agreements with every carrier around the world. So marrying all of this together for US is just the most natural thing because we have it all in house.
Adam Roads: We are the only company that can do it all in house.
Adam Roads: And so.
Adam Roads: Now you may there may be a natural question as to why is it taking time.
Adam Roads: And the answer is we did not want to and we would not have built a system that is not five key Oran all standards, we would not have done that simply because one of the benefits of the business case, one of the ways that the world will benefit from this is that it would be built into standard handsets that we do not have to.
Adam Roads: Manufacture, we do not have to.
Adam Roads: Subsidize, we do not have to uniquely market and distribute rather be built into.
Adam Roads: Every every device that gets shipped those chipsets are making now in the handsets will be available and we don't want to have a satellite if I had a satellite today I would not launch it today I would not because the satellite has a life of several years in the legal system and it does that that goes up there, but theyre not devices to talk to what is the point what is the point of.
Adam Roads: <unk>, a very expensive asset up in the sky without being able to get revenue from it. So the timing of when this update has to go up.
Adam Roads: What is the available population of usable devices compatible devices on Earth.
Adam Roads: He is a timing decision that is very important and that's why we are timing for that optimized window. It is not that we are late if anybody else is doing it earlier, either they're not doing it based on <unk> standard or if they do it they're going to end up with devices that are not compatible with it.
Adam Roads: So we are very excited about it I think we as I mentioned earlier to a different question.
Adam Roads: We are not going to make.
Adam Roads: In.
Adam Roads: And overhanging the market when we feel we have the proper substance at hand, but we are not missing the window of opportunity we will maximize our use our business case, and we will be out there taking advantage of this opportunity that is uniquely presented to us.
Adam Roads: So.
Adam Roads: I think that.
Speaker Change: Thanks for the question operator, I think we should move to one more question given that we are reaching.
Adam Roads: Close to the end of the hour.
Speaker Change: Thank you and then last question for today comes from Sam Mchugh with BNP Paribas asset management. Please state your question.
Speaker Change: Three short follow up questions first on <unk> can you talk about government support programs. So I guess, that's maybe lifeline could you maybe just dimension.
Speaker Change: How much of a boost out so many times at the moment as number one second question was on <unk> secured buyback.
Speaker Change: Why the huge box not macro Starbucks I guess why buy secured versus unsecured. So I think you said earlier there was no reason, but.
Speaker Change: I think the unsecured is were actually cheaper than the securities at a time.
Speaker Change: And third I think just to clarify, but T mobile and AT&T deals from where I always understood precluded you from white labeling I think the T mobile deal was public.
Speaker Change: Basically you are saying you can just offer them radar without pre agreement from AT&T and T mobile thanks very much.
Speaker Change: So three different questions. Let me remember there was a question on lifeline.
Speaker Change: So when when we when ACP program kind of terminated we started migrating our customers too.
Speaker Change: Our prepaid VAT.
Speaker Change: Various brands that we have so we are not no longer breaking that out as that has become a bit of a mix in a way that it doesn't.
Speaker Change: It doesn't it doesn't naturally lend itself to individual separate reporting.
Speaker Change: So we're not breaking that up there.
Speaker Change: There was a question about what was the second question I apologize liquidity wise.
Speaker Change: Oh, yes, we answered that I answered that previously you should not read into it I mean in fact that would be buying it with just a question that I think there was a fair question.
Speaker Change: Why do we buy what assets we buy.
Speaker Change: Yeah.
Speaker Change: Suggest you don't read anything extra to it other than the fact that we thought.
Speaker Change: That was available to us and it was available to us at a reasonable price and we thought we could buy it from a seller that could sell it to us with a proper mild and so theres no strategic especially the strategic rationale for why we did a versus B you could've done. The other one is we had access to it in a.
Speaker Change: Reasonable way.
Speaker Change: And then.
Speaker Change: The third question was I think John maybe you want to add to that one.
Speaker Change: Yes, hi, its John again.
Speaker Change: First of all we've got strong relationships with AT&T and T. Mobile we are on track with those partnerships and they are productive.
Speaker Change: To the extent, we want to enter new business arrangements with them such as wholesale that would require a new business deal and new cooperation to enter the wholesale market in a way that we could use their roaming services and you would expect that because if somebody shows up here for a wholesale depending on one volume of business to bring to the table that depending on what is that.
Speaker Change: Business case looks like.
Certainly there is no automatic on any wholesale my life I've never seen a wholesale deal that is pre wired.
Speaker Change: When somebody shows up it's always accustomed discussion custom unique negotiations on economics.
Speaker Change: We cannot make a statement on behalf of anybody has estimated that will be great agree or accept that in any customer negotiation, what the outcome would be so.
We will be not answering you very tangible yes, or no simply because.
Speaker Change: The real answer proper answer it depends.
Speaker Change: I think we can take one more question given that we still have a couple of minutes left so operator, let's please take one last question yes.
Speaker Change: Yes, and our final question comes from Jonathan Chaplin with New Street Research. Please state your question.
Jonathan Chaplin: Thanks, Hamid I'm wondering if you could give us a little bit more.
Speaker Change: Mueller on your.
Speaker Change: Neo aspirations, we sold that.
Speaker Change: Kimberly as had been launched I think the total plan is for 28 I'm wondering how many had been launched so far and then youre going to be able to do direct to device communications from the constellation and if not.
Speaker Change: Wondering how.
Speaker Change: Discussions with maybe Starlink Kuyper may have progressed on that front. Thank you.
Speaker Change: So the Leo system that we have had historically and we are in the process of continuing to.
Speaker Change: Work with it.
Speaker Change: Iot in what we call a narrow band is not designed we have never designed it has never been meant to do a direct to consumer mobile devices in your pocket.
Speaker Change: That we called out a lidar system, that's a Syrian system that we've had and we.
Speaker Change: The short answer to that is that we're not targeting it to that having said that I want to be here mentioning we have been doing messaging to device directly to.
Speaker Change: Mobile phones for instance.
Speaker Change: The pixel phone.
Speaker Change: Six of them in Europe now using our S band for couple of three years, now and Thats been commercially available.
Speaker Change: And commercial customers on it we can easily do the same thing in the United States. So.
Speaker Change: Doing the messaging that some of the other companies have done just pure messaging in regional shape or form here or there. It's not something we did this before anybody else have done it.
Speaker Change: And we have done it all in house assets, there's no partnership required between a mobile carrier space.
Speaker Change: Carrier, we've done it all in house, and we can do that but we're not we're not focusing on that because our aspirations were directed device is to bring in the service that would be on differentiable from what you're already using your mobile device in your pocket, but it would be an android phone or iPhone.
Speaker Change: Phone anywhere in the World and that's that's that is our aspiration nobody does that today in a proper way if anybody is doing that or is planning to do that in advance of 2028% as you mentioned 2028.
To say that it is either going to be regional is going to have incredible restrictions, you're going to get closer within hundreds of miles of kilometers of a border of any country youre going to start in a few with the neighboring countries carriers and networks and.
Speaker Change: Yes, there are bits and pieces of.
I guess sub critical solutions that are not.
Any interest to us our interest as a universal solution everywhere no interference no coverage holes no restrictions and that nobody is ahead of us and I don't believe anybody is going to be ahead of us.
Speaker Change: Thanks, Amit would you pursue that with your own constellation or would it make more sense to partner.
Speaker Change: Look we certainly do not rely on any body in order to get this thing done because we can do it all having said that.
Speaker Change: We are commercial animals, just like every other operator in the world if the pieces and parts of the picture can be complemented provided helps produce better by other people, we would absolutely take advantage. So theres no theres no pride of ownership here Theres, a pride of the ability to do it here because we have all the <unk>.
<unk> assets that over the past 15 years Echostar shareholders have created the division to have had starting 15 or 20 years ago buying these assets, where nobody else was thinking of them. They bought every pieces of it and brought them together with a view that a day like this we will be sitting here, having all of it in house now that doesn't give me.
Speaker Change: The permission or pride to say if somebody brought some embedded to the table that could do even better on my own that I would walk away from it I would absolutely take advantage of it.
Speaker Change: Got it thanks.
Speaker Change: Thank you.
Speaker Change: Thank you you guys in a quarter.
Speaker Change: And with that we conclude today's conference all parties may now disconnect have a good day.
Speaker Change: Okay.
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