Q3 2025 EchoStar Corp Earnings Call
Greetings and welcome to the EchoStar Corporation Third Quarter 2025 Earnings Conference Call.
This time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad.
As a reminder, this conference is being recorded, it is now my pleasure to introduce Dean Manson Chief legal officer.
Thank you Joe. Uh welcome everyone to Echo Stars, third quarter, 2025 earnings call. We will begin with opening remarks from Hamid, akavan president, and CEO, uh, of echo star, Capital followed by Charlie urgen CEO and chairman of echo star. We are also joined by other members of the leadership team.
We request that any participant producing a report, not identify other participants or their firms and such reports.
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 Securities. 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, Express or implied by the forward. That these days,
For a list of those factors and risks. Please refer to our annual report on form. 10 K, for the fiscal year. Ended December 3120 for filed on February, 27th 2025 and our subsequent filings made with the LTC this information and supplemental materials related. To today's call will be posted on our investor relations website, all questionary 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.
We refer to OA and free cash flow during this call the comparable, gaap measure and a Reconciliation for oi is presented in our earnings release and in the case of free cash flow in our form 10q as filed with the SEC today.
With that. I'll turn it over to Hamid.
Thank you, Dean, welcome everyone. And thank you for joining us today.
I would like to start by addressing the change um in our call format this morning in that we have Charlie are again our founder and chairman here with us today, Charlie and I will provide some updates on our business. Our recent transactions,
And discuss some changes within our organization.
As you know, we recently announced the signing of a series of major transactions 1 with AT&T at the end of August and another with a SpaceX in September value that approximately 23 billion dollars in 19 billion respectively. These transactions were instrumental in resolving. The fcc's review of the company's Spectrum utilization.
Farthest. Uh just this morning, we announced an amended definitive agreement with the SpaceX which builds up on the agreement. The companies entered into in September to sell Echo stars on paired. AWS 3 Spectrum, license for approximately 2.6 billion dollars in SpaceX stock.
Once these transactions closed, we will have the capital Runway necessary to continue to expand or existing operations as well as the freedom to pursue new opportunities.
This focus on New Growth Avenues significantly broadens the aperture of our business going forward.
In light of this increase in the scope of responsibilities for the company Charlie and I have decided to create a new division focused primarily on Capital Management and m&a going forward. I will lead this new division as the CEO of echostar capital. I will also continue to manage huge Network systems.
Charlie will take on their position of echo, star CEO. In addition to his role as chairman managing our video and wireless operating business units, these changes are effective immediately.
Building up on a 45 year. Operating Heritage across Communications media and Technology infrastructure Echo, start Capital will be a great Steward of our resources.
A vision and thesis driven a Strategic investment oriented operation with a Global Perspective and a proven track record of value creation.
Our institutional knowledge and experience uniquely positions Us in the marketplace to create Superior and Lasting value through Innovation, execution and innovation.
Allowing us to invest in operating businesses, we can expand our capabilities and Market reach and focus on initiatives that generate sustainable Chevrolet value.
Well, it's it's good to be back in the call and it's so funny going away. But, um, I just have a couple comments and, you know, my style is just to take questions because I never know what's on your mind and, um, I'm eat and I will do that and team. Um, 1 house issue is, is uh, we agree with the president in the sense that we think corporations should have to only file have to file twice a year.
um,
instead of quarterly because it just takes it. By the time you finish the court, you're almost starting to to work on the next 1. It takes it into an automatic time. Um, but since that has
That hasn't changed. You know, obviously, we'll still continue to file quarterly, but we met, uh, from time to time. Not do quarterly, uh,
Conference calls like this. Um,
Because we'll, we'll, we'll, we'll try to stay focused on our business. We will do a call next quarter for year-end, and obviously, we'll have a lot of things changing between now and then. But, um, after that, you know, we may be sporadic in terms of how we do, uh,
Have to do these calls. Um, so with that um I take questions
thank you, I'll appreciate
Did I use a gentleman? If you like to ask a question, please press star 1 on your telephone keypad and a confirmation tunnel. Indicate your lines on a question to you.
Give me a press star 2. If you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset. Before pressing the start,
And the first question comes from the line of John hodul with UBS, please proceed.
Great, thanks. Uh, good morning guys. Uh, maybe first on Echo start Capital. Um, Charlie could you could you talk about, you know, how it'll be capitalized, what? We'll, we'll all the proceeds from the Spectrum sales. Go go into Echo. Start capital, or, or just any of you tell us about those proceeds, would be great and just what areas do you expect you to invest in? Um, and then lastly, if I could, um, you know, you still have the AWS 3, uh, Spectrum, any update, you can give us on the potential sale of that block. And just how do you think of relative value for the paired versus the, the unpaired transaction we just saw, thanks. Yeah, thanks John. I'm gonna take the second part of your question. I'm gonna have. I think of each the better person to answer the echo, start Capital question. But on admin history, the the in big picture is the sale to, to SpaceX. Um, is timely? Uh, I think it's, it's, it's a bit it's a bit because the, we still own the pair awm history, and we sold, uh, some Spectrum to 8, uh, the AT&T the
The unpaired was was was for us, somewhat orphan Spectrum, but in SpaceX hands, uh, it gives them a lot of flexibility of of combining up a link and down link. Um, it and it, it gives them a lot of flexibility. For spectrum, might come in the future. So, um, for them obviously went for a lower price, um, but they're going to be able to make, um, obviously much better use of it than, than we can in today's terms. And so, um, and we're pleased to get SpaceX stock because, you know, we think that's the
Um, the meat will talk about this maybe later, but that's, that's obviously the kind of the first place that goes to start. Capital is going with with the, with the, with the equity interest in in in SpaceX. And we can talk more about why we think that's a um, an excellent investment. Um, the paired Spectrum, um, is it, we still have it? It it obviously we would transact if there was if there was a meaningful transaction, AWS 3 is is is quite a bit more. Um,
Valuable, when you look at it for us, and I think other people, I think the other carriers look at it the same way. When you look at Spectrum, value comes really from three sources. Um, one is, uh, is it in phones and devices? Um, that was one of the biggest problems we had in building our own network, was getting some of our spectrum in devices. But our AWS-3 paired spectrum has always been a device for as long as I can remember. Um, I doubt there's...
Of that obviously, is the auction comes up. Um, next year, uh, for some of the spectrum from a, a smaller swath of spectrum, but we're very comfortable uh, with that spectrum and as we'll work with the FCC in terms of the auction rules and and how that might all all take place. But um um I think it's very, I think it. I think it's the most valuable piece of spectrum we have and and uh,
We'll see where that goes. Um, I mean, yeah. Um, um, thank you. I'll, I'll answer the question regarding the, um, proceeds from the sales. Um, Our intention is that all of that would be within the echo star Capital, um, and Echo star Capital will, um, I I I I believe our shareholders, um, would be remiss if we didn't take advantage of 45 years of our institutional heritage.
And um, thesis driven, um, Innovation and execution in in, in the broad fields, that that Echo start has been involved in to maximize the value, uh, that they can get for that, for that, for that, uh, um, for that Capital, that comes into the company. Um, I, I, I, I can't see too many companies that have the Strategic understanding, and the breadth that Echo start brings to the table across Telco, space arrows. Um, um, defense, um, and all the fields that the the portfolio of families and vehicles. Start have been leading and involved in now, obviously we always, uh, will be great at stewards of capital, um, and will maximize the use of the capital and
Distribution of capital is necessary. We'll do that in an optimized way to our shareholders, um, as necessary. So, um, um, the the, the, the road map is not, um, 100%, um, laid out at the moment depending on how we, uh, see the market and opportunities could come to us. We'll we'll try to take advantage of every opportunity in the best way. And as I said um I I I can't imagine too many companies out there with the breath and knowledge that Echo start has has has gathered over the past 45 years that that's our plan at the moment. Obviously, as time goes on we will be more specific about how and where we deploy the capital or any sort of distribution. Um, that could be decided in the future, but to start, we need to get all of that in place. Um, the money is not here yet. So we have time to, um,
To organize ourselves around, how we would maximize the use of that capital.
And 1 more follow-up if I can, um, just Charlie any update on negotiations with the tower companies and and what happens to the The Entity the Dish Network that has the deals with the towers? Well that well that's so that entity uh sort of stay in place.
Well, the, the, uh, you know, obviously we had some unprecedented, the kind of curve balls on us, um, when the FCC informed us that, that they were going to investigate take the Spectrum. So, um, you know, obviously, we we believe that's a force measure event. And, uh,
and so,
We're happy to we'll work with all our vendors. Obviously, we're the biggest company that got affected by that but but obviously we also have other vendors and people we worked with for a long time. They're, they're affected by that. Um, and we'll work with them to the extent that they want to work with us, to try to resolve the those issues. Um, the, um, um, unfortunately, the 1 company has already conventional litigation and that kind of sour, some of the ability to talk to people because once things go into litigation, its lawyers talking to lawyers and it's not business people, talking to business people and so that's a bit unfortunate. Um, but um, the uh, um, the the network is was in is in obviously an independent company. When we when we did it,
Still an independent company. Um, and it it, it will, you know, obviously handle this through that entity, uh, it'll handle all these negotiations through that entity. So we'll see where that shakes out and we hope that everything can, you know, other than other than other than the current litigation that we hope that that those things can be resolved and we're open to have those discussions.
Great, thank you both.
The next question comes from the line of Brent penser with Raymond James, please proceed.
Hey, good morning, everyone. Thanks for taking the questions. A couple of follow-ups on some of John's questions. So you clearly are excited about the SpaceX stake; that's now getting bigger. As you bring in some of this net cash, how do you think about that as an additional area to deploy capital? And as SpaceX raised this additional capital, do you have rights in terms of?
Um maintaining or potentially growing your stake just help us think about that SpaceX stake and and where you might put your capital.
A very excited about having that cap that equity on our balance sheet. We consider that our first investment in ecos, our Capital, um, we believe that, um, Equity has tremendous growth opportunities, uh, just, uh, just by the fact that it's Basics has such a, um, significant lead in the technology within the space. And the space is becoming a the next infrastructure in the world. Um, as launch capabilities and cost has become economical and also Global Security, and communication has become a more important in the age of AI. Um, so we we see that as being a strategic holding we obviously will, um, keep that our our balance sheet, uh, excited about having the additional 2.6 billion that joins the, um, we certainly, um, look to have, uh, additional Investments of similar strategic nature. As as we, as I mentioned, there's a number of areas number of industries that we have a Heritage and, um, um, deep thesis about understanding of those Trends within the industry,
Will be very, um, careful about Investments that are synergistic with our thesis and understanding. Um, very excited about that opportunity. Um, I can't comment about us um getting more um SpaceX Equity or uh some other transaction. As I said, we're just this is the first day of our announcement about how we going to go forward. Um, but we will be Diversified, we'll certainly have, um, uh, we'll be great at stewards of capital. And as time goes on, we'll be more specific about, um, uh, the, the transactions.
Good, good news, is that we still have a few more months before we even have the capitol on our balance sheet. So we do have the time to do a proper job of uh, planning and communicating with you where we heading.
Yeah, and I I'm just going to follow up a little bit with with uh this will give you some insight. I think to the way he made and and and Echo starter will think about extra Capital think about things. But uh, SpaceX
Besides about, that is an investment. And and
What things we look at. First thing, we look at is management.
And and and SpaceX management, you know, we've got to work, gotten to know over the over the last 10 years because we've launched on them and, and they really have been the best vendor that, that we've worked with in the space. Um, and and, and very solve very complex problems for us to move very quickly. Um, and then we've worked a lot closer obviously, as we've gone through these deals and, and, and, and, and, and so they, they, they don't brag about themselves. They're, they're, they're pretty understated, but they are doing, um,
Based on my experience, I they're doing incredible things and with space whether it be launching or or satellites or or services. So so the second thing you look at is obviously are they are they is this a place that
We're over the next decades. Um, there's going to be a business and and as to me said, space is going to continue to grow. Um,
Particularly, you see, governments with golden dome and security, but it's but it's also the consumer and the ability to, to do Broadband from satellite and also connected devices, those 2, things fit together. There's a lot of synergy between those 2 things in 1 company. So, um, and the third thing is, you know, you know who's going to be the winners and losers and we look at other Industries, you know, I don't know who the winner in AI is going to be 1 thing. I'm sure of that will be winners and they will be losers. I just don't know which 1 will be winners and which ones will be losers, but in space, um, I think it's pretty obvious that while there's there's, there's some companies, doing some very interesting and creative things. Um, SpaceX is, is is going to be the leader for the foreseeable future because they they have the most efficient launch capability, um, and satellite manufacturing capability in my opinion. That that I've seen. So when you had, when you had all that together, um, and then they, and then
I think, you know, when we built for 17 years, um, this ability to technically be able to go satellite to the device, and regulatory-wise, and the spectrum, and all those kinds of things, we've now, um, that's now in SpaceX's hands or will be in SpaceX's hands. Um, we know that that worldwide capability in the same frequency, um, we know that that's—we would have built a good system, but they're going to build.
Even the greater system and the faster period of time. So um,
uh, you know, that that that's going to be a that that's going to grow their business by um,
Probably that's going to that, that business by itself is going to be a huge part of where they grow. That's not probably, in the, in, in people's calculations of their value today. So so that gives you a feel how we think about things.
the timing of when we might have a resolution, um, as we think about litigation, and negotiations with them,
Yeah, I I I just don't think we would get into that. I mean the only thing I would say is litigation is is not positive.
Okay, thanks guys.
The next question comes from the line of David Barton with new Street research, please proceed.
Hey guys thanks so much for for taking the questions, appreciate it. Um I guess my first question Charlie, you know there weren't many numbers in in the press release today about the SpaceX AWS 3, unpaired deal. But 1 of those numbers was that you pay or you you invested at a $122 price.
So, could you, for the public side investors, tell us what information you have? What information can you share to support?
You know what? Apparently is your belief that 212 is an appropriate valuation for this for this SpaceX company today. Um, and then I guess my second question is maybe for Hamid or maybe you also Charlie um the taxes on the asset sales. Um so what the taxes would be would be helpful kind of giving all the different moving parts and depreciation and and and capitalized interest. But also there's a theory out there that if your frustration of purpose argument
Works with respect to the towers that you have access to the 1033 um uh uh stepped up basis uh, on on these Spectrum sales. And and that the taxes could be far less than maybe the market imagined. So I wonder if you could kind of kind of opine on that, thank you so much.
Yeah, so uh I really I really in terms of valuation of SpaceX. I would just say that, I think I'm almost repeat myself that that we don't, you know, we
Have a pretty good feel of of what they're doing and where they are. I think they just publicly announced 8 million customers and and uh and
And Broadband. I think you could overlay their growth in broadband. And and, and, and then overlay, a device growth and looked along the same curve, uh, and you would see
A, a greater much greater valuation than the 400 million dollars. So, and again, as I said, the management team is, is, is excellent, uh, and understated, in my opinion, in terms of what they do. And, and, uh, um, they have a pretty big mode around their business that you have 90% of the launch business and that's and they've, they've launched the new generation of satellites, which is at least twice as big as anything else out there. Maybe even bigger it wants a 12 times and they've caught it returned to return it back, right? And other people are you know, unfortunately are struggling to get their first first ones up. So um I just think they're I think actually they I think their lead is actually growing
Um, their biggest competitors, China probably but the China, I don't know. This has even successfully landed Rockets. So um, their lead is, is big and growing. So if you, if you had to pick a winner in an industry from my opinion, you know, I could be wrong on this, of course. And while they'll face competition and there's creative things going on in this, in, in, in, in, in their space. Um,
they're the most obvious of any industry that I know of, they're the most kind of obvious winner, right in in terms of, you know, every other industry you just got, you know,
a lot of people that you just don't know who else ends up on top and of course SpaceX still has challenges that to get through but but and there's still risk there. But that's, that's the way we think about it. Um, that's the way we'll think about things that that goes to our Capital. Um, you know who who who who has those characteristics. Um, with the, on the tax side of it, we're well aware of 1033, but maybe I turn that over to to Paul. Or do you want to or maybe do you want to take that? I'll make a comment on the um um, then we go with Paul. Um, um, I first of all, I I absolutely endorse Charlie's the statements of the SpaceX, but first we want to mention that we are not insiders to a SpaceX. So we have no Insight knowledge of a SpaceX and I, um, Charlie and I's views are 100% aligned, and common on how great a SpaceX is, but that's our just personal views and based on what we have seen. Um, you should rely on this Basics as, um, as statements on on what they see about. The valuation of the business, we are excited about having that Equity. Um,
Combination of our unoptimized taxes and unoptimized unoptimized, uh, value of our liabilities. So that range is, um, what we? We essentially think we have now can 10 1033, you know, provide additional benefit and reduce that number. I'll ask Paul, you know, he he might have some knowledge in terms of how applicable there may be. Paul maybe you can call it on that. Thank you. So you know there's a lot of puts and takes their
The AT&T transaction is going to close in 26. The SpaceX transactions expected to close in 27. We have nols that played in the mix, and we're going to do everything. We possibly can to mitigate the exposure, uh, we're working on that currently, but the range that he gave that includes both decommissioning costs and tax of 7 to 10 million dollars is still currently our best estimate.
So so just follow up real quick. The 1033 is, is not in the 7 to 10, but it's a possibility, does it? Is it contingent?
On.
On kind of how these litigations go, um, and whether you're successful in making this frustration of purpose argument, which would, um, allow you to kind of move up the basis and shift assets to another class.
Well, I, I'm just saying it's been used. It's, it's been used. I think some of the 600 megahertz, uh, broadcasters, uh, when they put a spectrum in auction. I think they use. I think they use 1033 in some cases successfully. So, um, we're we we're aware of it and, and, um, you know, obviously it's
um,
you know, there seem to be a lot of similarities between you know has been used in the past but you know it's every everything is is specific. Is is is is specific. And you know, we'll look at that as part of our strategy um and I don't think it's contingent. Yeah. I I just to add to what Charlie said. It's not contingent on what happened.
Those are to totally independent, uh, Concepts.
Got it. All right. Thank you so much guys. Really appreciate it.
The next question comes from the line of Walter Pittock with Light Shed. Please receive.
Operator, may we take your questions, can you hear me now? Oh yeah, we can.
Yes, yes.
I know I hate that when I say it that way. Um,
On sats cap. Um, I assume all the cash from all the Spectrum sales is is going into their does that keep it away from?
DVS shareholders and any Opex.
Uh, obligations meaning like the tower companies. Um, and then I mean, you kind of like danced around
Returning the capital saying if it's necessary to do it. I don't know when it's ever like required that that you distribute cash, but can you give us a little bit more color?
On kind of at what point do you say, hey, we've used our 45 years of experience, we've looked around. There's not enough interesting stuff, and we're going to send cash to, uh, to the shareholders.
Um, let me take that piece first. Um,
Look at, um, first of all, um, comments of dancing around. Um first of all about is a little early for me to give you a a exact formula or recipe or road map for how we're going to utilize the cash. But as you would expect as any great company that has a institutional knowledge and Heritage within certain verticals.
The best ability, the best option usually is to use that knowledge to deploy the capital because they're strategic. They're the Insiders to an industry that a financial investor from outside will never never get that Insight, right? So it will be, we will be remiss not to take advantage of all that institutional, knowledge, and return, the capital to shareholders, that would. Now they have to deploy that capital in a way that, you know, they would, they would not take advantage of this disability. Um, I think the shareholders that have been with us and we have a great ones around the table, right here, uh, Charlie himself. Um, would would certainly want us to maximize the value. Now, there's a limit to that, you know, if I had 10, you know, 2 trillion dollars, I couldn't use all of it. You know, how much institutional knowledge I have? I probably couldn't use enough because the industry just doesn't have that ability or the the, the just the opportunity is not there because the market is not good or the industries that we focused on have are out of favor or they just don't have enough, um, great, uh, opportunities for us. Then we obviously,
We have deep heritage.
Uh, this company has proven, they can return value by the fact that you have seen for the past year, uh, uh, the thesis that Charlie had put in place decades ago, has come come to play, there's much more we could do there but if at the end of the day, we have excess Capital beyond what we can.
Properly. Use a strategically used. We certainly will not sit on it. Uh, and, and, and unoptimized way, um, very, very early stage for me, to make any further detail on that. If you're going through for me to say that, just trust us. That we'd be great at stewards of capital. We manage it like our own Capital as it is our own capital.
Primarily.
And then just is this protected from dbsd in the tower company and then just really a follow up on that. Um, can you at least say that
You're not going to like build a network or or something of that. Ilk. This, these are really more passive Investments that you're giving that you're using your years of expertise to to look at.
Yeah, this is Charlie. I think. Maybe Paul want to jump in there, but the the
You know, obviously your capital structure is well known and they're, they're obviously separate and independent entities for specialized purposes. Um, you know, 1 thing that that is clear for the AT&T transaction. Um,
Is, uh, you know, we will be paying the DBS. The the the DBS will receive about 2.8 billion dollars for tranche b, um, um, which which is the CB band spectrum that we're selling to that, they that's collateral there. So they'll the 1 thing you can say, is that there will be Capital moving into the DBS, it at least 2.8 billion dollars
And then, just on the types of investments, I assume these are not operational. These are all passive, like, hey, we're investing in.
Great new things. And maybe SpaceX gives us access to
So, uh, um, well, we certainly don't intend to be, uh, purely, passive investors. Um, we don't intend to do that because, uh, obviously, we, we will, we, we do not want to be, and it does not is not in our best interest to our shareholders to become about 40x, uh, regulated company Investment company. Uh, we will have to manage this, uh, according to those rules, which means we'll make a combination of active and passive Investments. And even when we make a passive investment, it will be a strategic for us. It will be a, a thesis driven investment. It will not be um, just uh, we we're not wealth managers. We we don't view ourselves as uh um, you know, just just broadly, um, deploying uh, capital in the marketplace and we would only focus on areas where we understand. Now, in some cases that investment cannot be a controlling investment or or significant influence investment.
But as is the case for SpaceX, the valuation of that company is very high. We would not be able to provide enough and and we would not have access to enough equity to make that 1 a uh, control or or significant influence as defined by the 40 act. Uh, but we will balance that with other Investments, uh, that we will have control and we will have operating influence to the point that we manage around any sort of Regulation, uh, that, uh, that would be in front of us. Um, we will, we will be much more precise in all of these as time, goes on great questions for today. But we are aware of how we need to manage that and we are not going to become a passive Investment company. Uh, we we we, we like to rely on our heritage of operations. As I mentioned, we think we can combination of our understanding of Technology. Our ability to execute and our heritage of innovation will give us a very good platform uh, to create, uh, you know, great value.
and I, I
We?
We own and run, you know, 3 3 different companies today and and Hughes and and uh and and additions, flying and and uh, and and and boost. So, and clearly, um, you know, obviously from a boost perspective, you know, we think we have we that that's a business, that, that should grow. And obviously, um, um,
You know, the video business is so much challenged as it has been for a decade but the but but we still, you know, see those businesses lasting for a long time. Yep.
And obviously have, uh, both Charlie and I have, uh, extensive operating experience, uh, uh, not just domestically, but also globally. Um, uh, we, we have a very broad, uh, range and scope of, uh, uh, places and domains, and verticals that we can deploy the capital effectively.
Got it. Thank you.
Thank you. Good morning. Um, Charlie in your brief opening comments. Um, you described the reasons that you're going to do a earnings call for the fourth quarter was the end of the year and there's you alluded to changes that could be coming between now. And then it was just curious. If you could give us a little bit of a preview or road map of, you know, the range of potential changes that can continue to happen for Echo, star between now and your fourth quarter, earnings call and then secondly, um, just to follow up on, uh, kind of moving beyond being a wireless, uh, Network operator. Um, as you're selling the Spectrum. At what point, can you unplug the radios so that you're no longer, you know, meeting the minimum use requirements. But you, you know, you're able to uh, start saving money from doing that. Is it when these transactions close? Is it now that you've announced a few transactions and you know, you have
Maybe some more possibly, you know, that you have to kind of figure things out for or um what's the the formula where you could just start unplugging?
Yeah, but on the second part of that, you know, we work with we'll work with. We we really need to work to Regulators on that. Um and so those discussions are ongoing and so it wouldn't be appropriate to to to to discuss that. But obviously we'll have, we'll have more color on that. Um, early next year. Um, uh, the uh, I say I'm going to give you a general answer, because very good question about what, what might happen between now and February? You asked a good question. Um, I think I think we while we I think we pivot 2 pivots in our company. 1 is the pivot to to to being an, you know, a, a capital rich company. Maybe more asked that light, but the other pivot is, is within Echo star. The, the where I'm going to be involved in the day-to-day operations now is, it is to Pivot to long-term thinking. So we, you know, we had to think about things short term because we were putting all our Capital into the build out of our Network. Um and we uh had lots of requirements.
Regulatory to do that. So we did that. So we had to think that about things and the rest of our businesses in the short term short-term way. Um,
That historically is not the way we think. As a company, we 1 of our principles is to think long term and we can get back to that principle now. And so, um, I think you'll see, you'll see that we're by making by thinking about things long term, we maybe we'll take a little bit of a step backward, short term because when you go from short term to long term, is a little bit of a step backward, but I think you'll see that
In a general, sort of way, um, will be more competitive in in terms of what we're doing and some of our businesses will think about, uh, we think about things in terms of long-term cash. We don't really think about it for ibida and those kind of metrics, um, we think about deploying Capital, where we get a return. Um, and we think about, um, strategically particularly in Wireless where you're where, you're 1 of really 5, you know, counting cable, you're 1 of 5, companies, that, that are basically doing the same thing. How do we do some things differently and how do, how do we, how do we look like a little bit different animal than than, than than what everybody else is doing? And so, you know, we we we're kind of going, we were building the highway and we were, we were Uber, and we were building the highway. Now, we get to be Uber and we don't we just rent the highway. And, and so for that, that, that puts us a little bit different that situation and uh, um, I I, I will say that that, um, the, um, the the I don't think people,
Truly understand the efficiency of what we call a hybrid mno, um, where where we rent the radios, but we have the core basically the brain, the cloud and how the, how the system operates. So we could have a differentiated experience for our customers. We can, um, we do get a lot of data from the from, from what we're doing with customers. So we can make that experience better and automate that experience. Um, and yet we don't have the the, um,
Burden of of, of building and maintaining the towers which which normally wouldn't be a problem, but our scale is so small, um, that, that that that was, that was a good was a challenge for us so um, I don't know that totally answer your question but from a big picture, we're going to be thinking a little bit longer term in the core business.
He's very much.
The next question comes from the line of Ben swinburne with Morgan Stanley. Please proceed
Where you are as you as you know, on the hook for any shortfall. Um with the multi-billion dollar liability is there any opportunity with the FCC?
to sort of combine those 2 to try to monetize a spectrum and also kind of de-risk, the auction from an echo star perspective would would love any thoughts if you have any to share,
Yeah, Ben it it's a good question. And, and and, and, and I'm not going to answer it, but I'll, I'll talk about the edges of it. But, I mean, obviously the, the, the this FCC put us in a difficult difficult situation. We went kind of through the 5 stages of, you know, grief denial, and anger. And, you know, and, and and, and depression. And, you know, now now we're at acceptance, of course. And and that's the first thing from our perspective. But the second thing is, you know, we really hadn't talked with the FCC uh uh uh uh, folks for a couple years. And and and and and once we started having conversations, um, you know, we we've gotten on the same on the same path. And and, and this FCC has quite the vision of of, we didn't totally agree with it, but they want Spectrum to get used to get used more quickly, and, and for the benefit of of more and more Americans. And, and and it, it it's it's, it's hard to argue with that vision. And once we've, once we've started communicating, you know, now
We're in lockstep really, with with, with where the FCC wants to go, and it's our job to, to now work with them. And, and make sure that that every all our assets get get, put to the best use of American public part of that.
Indirectly goes to your question is you look at the AWS 3 auction coming up. Um, they're potentially are are ways to make that the the most efficient options. There's there may and we're in the process of those discussions with the FCC and they will. Obviously others will have input into that as well. Um, uh, but we, at least have a sounding board to say how, how can, how can we share your vision, you know, this FCC to get this spectrum in use as quickly as possible. And, uh, uh, and and the hands of, of, of people that will compete with it, um, 1 of the great things about the AT&T deal we did is because of our our, because of our, because of our, uh, m m m m, m, m, m hybrid MMO deal. With AT&T we get to actually use the spectrum that we sold them. So, um, um,
You can think about, you know, those things in different way. And and, and so this FCC is going to. They have a vision of where they want to go. That they're they're they're they're going to, they're going to be the most influential influential FCC that I've worked with ever. Um, and so it's our job to
To help them get there, where they want to go and, and, and, and that's what we're going to do.
That that's helpful. Um, and just to follow up on, on the Boost business. Now that you're you're running it. Um, you know the history of mvnos these are these are typically not great businesses and I know this is a hybrid mvno, but you sound excited about the opportunity, you know, it's it's it's got revenue scale but it's it's at least to a degree but it's still burning a lot of cash flow. I know you're going to start decommissioning. You've started decommissioning, the network. Just can you talk about, I guess the Strategic vision for the business and then I don't know if there's any help you can give us on the past to getting this thing to cash, flow positive. Um, now that you've switched models
Yeah. So
The, the strategy is simple. We we have to do things. We have to do 2 things.
Right? And if you look at any any company that's the fourth or fifth player, this is what they have to do to be successful. You have to
You have to do 2 things.
Yeah, you have to use technology.
Uh, in a way to, to be to be different, uh, and you have to do things that you have to do things that the other guys aren't doing. Are they could do, but they won't do they, they didn't make sense for them to do it. So on the technology side, we've already made our first strategic move, which is, uh, an agreement with SpaceX, uh, for our boost customers to have worldwide connectivity, uh, to the handset, both for voice text and Broadband. So, uh, I'm sure others will follow suit, uh,
with SpaceX, but
You know carriers now are are many carriers have some Choice as to who they might sign up with and and so there's a a wide variety of of of where those carriers are going.
Too much scale.
And any help on just getting the business to profitability. I don't know how much the expense base goes away when you fully convert anything like that.
Those of you who who have been with us for 30 years, there's a public company knows that that that we'd like to run things for cash. And we don't like
we don't like losing money, so um,
I don't have a and we'll have a lot more on that, but I I think that that as you move to As you move to long-term thinking that, that becomes an easier path in short terms always difficult. Um but that was that that's just the the cards that were played. We had to play short term. Now now we get to play a bit a bit better.
we're we're better as a company when we're thinking long term,
and we're definitely going to be and and again, if if if
if if
I think we're the nature of our hybrid M. It's under estimated by the market people try to say it's an M or it's this or that it's a it's a different animal. And
and um,
Um, the AT&T network that we ride on is, is is a great Network. And with our Spectrum, they're already putting our CB band to use is my understanding, uh, some of it so that Network's only going to get better, um, and
um, so
I just think, I think we could be more competitive. We certainly will be more competitive than, you know, than than we have been in the past. Yeah, so so adding to that um, you know, 1 of the things that that
that that hopefully shortens the path to profitability. It it it's it's the deduction of the fixed cost of the business which you can imagine is drastic.
Certainly from a network side you you you need it. Much greater scale.
To reach that profitability point to retire. This fixed cost obviously not having that shortens the horizons tremendously and second you know, having a mvno deal with AT&T kind of um makes our cost more variable on a usage basis. So again another way to create operating leverage for us as the more we sell. I mean that, that obviously, if we don't need to have a, a large scale in order to resolve. So all the Strategic in that Charlie's talking about,
Should should get us to profitability in a much sort of horizon that you would have originally modeled, we we're not going to give you that today, but obviously, as time goes on, that information might become more available to you. Be excited about, we really excited about our ability to, um, develop that business as the most scaled MV. You know, hybrid MMO mvn model in the, in the marketplace, with the benefit of having access to a space and having to the great coverage of AT&T which is using our inspection. Now, will be the best coverage in the nation in our view. Thank you. Uh, next question, operator please.
The next question comes from the line of Brian Crafts with Deutsche Bank. Please proceed.
Uh, hi. Good morning. Um, I had a few if I if I could. Um, first is a follow-up on the tax side, I was wondering, if you could confirm that, there will be a tax benefit from the impairment charge that you're taking today. Uh, and is that benefit ex excluded from the 7 to 10 billion range that you cited. Um secondly. Just a follow-up on AWS 3 and the auction does does the timing of the auction matter as it relates to you selling the paired, AWS 3, um licenses you know, is it is it optimal to wait? Is it better to do it first? Just wondering how you're thinking about that and, um, and then also, the converts. I was wondering if ultimately, you plan to settle those in cash, or stock.
And then lastly would just love to hear your latest thoughts, Charlie on a potential, uh, DBS merger with Direct TV at this point in time. Thank you.
You. Yeah, this is Paul good question there. I'll take the tax question. Um as it relates to the impairment charge, some of the items have already been deducted. For instance, we take bonus depreciation on the network or advertise, the FCC spectrum. So we won't get a benefit of that. But the other costs we will and to answer your question, is that included in the 7 to 10 billion dollar range? Uh, yes, that is
um and this is Charlie in terms of in terms of ads AWS timing and and and so forth again, that's
I wish I could give you more information, but we're really working with the FCC to make that happen.
A to make sure this most successful option possible and that and that that inspection gets used as as quickly as possible. Um but we're again it's it's it's pretty valuable Spectrum. I I I'd say that and and as well as far as the converts um
Yeah, um, certainly Echo start Capital, we look at every opportunity for Value creation to inorganic transactions. Uh, you know, that the dish, um, indirect TV that always has seemed like a natural combination and it's been an in-house combination. Uh, our track record of making network has not been great. So it's hard to predict how it might go. But certainly, uh, um, we, we will always look at any opportunity to, um, you know, take advantage of assets. We have in house with a transaction. Um, I can't make any prediction right now about how that might go but uh, that that that item has always been on our radar and Charlie has been very vocal about the fact that the combination of the 2 companies would create significant of tremendous amount of value.
Operator will have time for 1 more question.
I have a last question will come from the line of Chris quilty with quilty space, please proceed.
So, I was hoping you could uh, possibly give a long-term update.
Plans for 1 of those operating businesses Hughes um you've obviously got a downturns in the the vsat business and the consumer Broadband it looks like IFC is growing are their thoughts on either growing that get business organically or non-organically and and What markets are you most focused on?
Um, hey Chris, how are you? Um, regarding Hughes, as you know, we have been on a multi-year journey at Hughes—at least 3 years now.
Uh to transition that business more towards an Enterprise business uh from a consumer business and uh uh, purely from the um, realization and understanding that the consumer connectivity to satellite is a not highly competitive, given the SpaceX is offering and perhaps in the future, uh, other Leo offerings such as Kyper. Um, we recognized years ago that we could not have a Leo system and a Broadband side to compete with those. So we started shifting towards Enterprise. Um, our expectation is that you know um as as as as as early as next year, we'll be be crossing over. Uh the you know, the 50% mark on Enterprise, um Revenue. We have had significant uh, progress in an era which we had almost no share on 3 years ago. And now we are only 1 of the couple of companies in the world that are growing on the arrows side. So there are some progress being made in there.
We we're happy with that. We still have a long journey to uh, make use, um, you know, much larger scale in the enterprise. We are on The Gardener's leader quadrant as 1 of the few. In fact, in this industry in their industry in its industry, there is none other than he used on The Gardener's leader quadrant. So it shows uh the ability of use to serve Global Brands across the world.
We'll try to monetize and maximize that, if, if there's any sort of m&a opportunity, as I mentioned on the list of areas domains, where we will be looking for additional m&a. You saw 3 or 4 of those actually fall within the users.
Purview, you know, that, that that's Aero the space. Uh, we talked, we talked about Enterprise Services, we talked about the events and domestic manufacturing, which I think all of those are areas where we have green shoots and a, a good understanding of the trends. And uh, if there's uh, Echo, start Capital, if you find opportunities in any of those domains, that would enhance user's Position, will take advantage of that.
That concludes our call. Thanks for joining. Thanks everybody. Thank you.
Thank you, this concludes today's conference. You may disconnect your lines at this time and thank you for your participation.