August 10, 2023
Charlie Ergen, founder and chairman of the Dish and EchoStar satellite broadband companies is merging the two units in an all-stock deal he says will better position his empire to compete with AT&T and Verizon in the market for next-generation wireless services. Dish, which operates Boost Mobile, currently has a deal with T-Mobile for 5G. FactSet places Dish’s current market value at just above $4 billion and EchoStar at nearly $2 billion. “This is a strategically and financially compelling combination that is all about growth and building a long-term sustainable business,” said Ergen.
Ergun spun EchoStar out of the publicly traded Dish in 2008. The Wall Street Journal says the merger is “aimed at giving him the financial flexibility to build a nationwide wireless network,” something the billionaire has been working toward for years.
When the deal closes, Dish shareholders are expected to own 69 percent of the newly combined company and EchoStar shareholders the remaining 31 percent. WSJ reports that EchoStar CEO Hamid Akhavan is expected to serve as president and CEO of the combined entity.
The transaction “will reunite Dish’s pay-TV business and fledgling 5G network with EchoStar’s satellite-communications infrastructure,” WSJ writes. “There are a lot of good companies in satellite and a lot in wireless, but not a lot do both,” Ergen said.
Ergen built his empire over four decades, founding EchoStar in 1980 as a satellite TV technology company. Dish was incorporated in 1995 and launched its programming service the following year.
Today, “Dish serves millions of pay TV and cellphone customers through brands including Sling TV and Boost Mobile” and has “amassed a cache of spectrum licenses to support its wireless ambitions,” while “EchoStar runs a fleet of satellites that serve HughesNet home-Internet users as well as business and government clients,” according to WSJ.
Dish also owns Ting Mobile, Republic Wireless and Gen Mobile, per CNBC, which writes that as part of the merger announcement, “Dish said its 5G network now covers more than 70 percent of the U.S.” EchoStar, which launched its JUPITER 3 satellite last month, reported Q2 net income of $9.1 million and revenue of $453.1 million this week, “marking year-over-year declines of 13 percent and 9 percent, respectively,” CNBC reports.
In 2021, Ergen told investors he was “making a play to be the fourth national player for mobile service,” through means including virtualized 5G networks running on the cloud, which he, Verizon and others have been testing since 2020.
Dish Network Corporation and EchoStar Corporation to Combine, Press Release, 8/8/23
Dish Posts Sharply Lower Q2 Profit, Sets Deal to Recombine with EchoStar, The Wrap, 8/8/23
Dish Network Loses 284,000 Subs as Second-Quarter Profits Drop, Next TV, 8/8/23