EchoStar Corporation
NasdaqGS:SATS
$ 15.25
+ $1.47 (10.67%)
$ 15.25
+ $1.47 (10.67%)
End-of-day quote: 03/11/2024

About EchoStar

EchoStar Corporation, together with its subsidiaries, provides networking technologies and services worldwide. EchoStar share price history

The company provides internet services to consumer customers, which include home and small to medium-sized businesses, and satellite and multi-transport technologies and managed network services to enterprise customers, telecommunications providers, aeronautical service providers and government entities, including the U.S. Department of Defense.

Business Segments

The company operates through two segments, Hughes and EchoStar Satellite Services segment (ESS segment).

The company’s operations also include various corporate functions (primarily Executive, Treasury, Strategic Development, Human Resources, Information Technology, Finance, Accounting, Real Estate and Legal) and other activities, such as costs incurred in certain satellite development programs and other business development activities, and gains or losses from certain of its investments, that have not been assigned to its business segments.

Hughes segment EchoStar share price history

Hughes segment provides broadband satellite technologies and broadband internet products and services to consumer customers. The company provides broadband network technologies, managed services, equipment, hardware, satellite services and communications solutions to government and enterprise customers. The company also designs, provides and installs gateway and terminal equipment to customers for other satellite systems. In addition, the company designs, develops, constructs and provides telecommunication networks comprising satellite ground segment systems and terminals to mobile system operators and its enterprise customers.

Hughes segment incorporates advances in technology to reduce costs and to increase the functionality and reliability of the company’s products and services. Through advanced and proprietary methodologies, technologies, software and techniques, the company continues to improve the efficiency of its networks. The company invests in technologies to enhance its system and network management capabilities, specifically its managed services for enterprises. The company also continues to invest in next generation technologies that can be applied to its future products and services. In addition, the company is providing wireline and wireless capacity to utilize in markets that include residential, community WiFi, backhaul, and other enterprise broadband and multi-transport services.

Hughes segment uses capacity from the company’s owned and leased satellites, including additional satellite capacity leased from third-party providers to provide services to its customers. The company also uses other multi-transport capacity that includes cable, fiber, 5G, and 4G/LTE. In most areas of the U.S., the company is nearing or have reached capacity, which has resulted in its consumer subscriber base becoming increasingly limited. The company’s Latin America consumer subscriber base in certain areas has also become capacity constrained. These constraints are expected to be addressed by the launch of the EchoStar XXIV satellite.

In May 2019, the company entered into an agreement with Bharti Airtel Limited (BAL) and its subsidiary, Bharti Airtel Services Limited (together with BAL, Bharti), pursuant to which Bharti agreed to contribute its very small aperture terminal (VSAT) telecommunications services and hardware business in India to Hughes Communications India Private Limited (HCIPL) and its subsidiaries, the company’s less than wholly owned Indian subsidiaries, that conduct its VSAT services and hardware business in India. On January 4, 2022, this joint venture was formed (the India JV) and subsequent to the formation of the India JV, the company holds a 67% ownership interest and Bharti holds a 33% ownership interest in HCIPL. The India JV combines the VSAT businesses of both companies to offer flexible and scalable enterprise networking solutions using satellite connectivity for primary transport, back-up and hybrid implementation in India.

In August 2017, the company entered into a long-term contract for the design and construction of the EchoStar XXIV satellite, a next-generation, high throughput geostationary satellite. In December 2020, the company entered into an agreement with a launch provider for the launch of EchoStar XXIV. The EchoStar XXIV satellite is primarily intended to provide additional capacity for the company’s HughesNet satellite internet service (HughesNet service) in North, Central and South America, as well as enterprise broadband services.

Additionally, the contract requires the payment of additional liquidated damages to the company in the event of further delay, and provides for its right to terminate beginning January 1, 2024, if the satellite has not yet been delivered.

Customers

The company’s enterprise customers include, but are not limited to, lottery agencies, gas station operators, aircraft connectivity providers and companies with multi-branch networks that rely on satellite or terrestrial networks for critical communication across wide geographies. Most of the company’s enterprise customers have contracts with it for the services they purchase. The company’s Hughes segment also designs, provides and installs gateway and terminal equipment to customers for other satellite systems and provides satellite ground segment systems and terminals for other satellite systems, including mobile system operators. Developments toward the launch of next-generation satellite systems, including low-earth orbit (LEO), medium-earth orbit (MEO) and geostationary systems, as well as other multi-transport technologies, could provide additional opportunities to drive the demand for the company’s equipment, hardware, technology and services.

Competition

The company’s primary satellite competitors in its North American consumer market are ViaSat Communications, Inc., which is owned by ViaSat, Inc. (ViaSat), and Space Exploration Technologies Corp. (SpaceX). The company’s principal competitors for the supply of VSAT satellite networks are Gilat Satellite Networks Ltd, ViaSat, and ST Engineering iDirect, Inc.

ESS segment

ESS segment provides satellite services on a full-time and/or occasional-use basis to the U.S. government service providers, internet service providers, broadcast news organizations, content providers and private enterprise customers. The company operates its ESS business using primarily the EchoStar IX satellite and the EchoStar 105/SES-11 satellite and related infrastructure. Revenue in the company’s ESS segment depends largely on its ability to continuously make use of its available satellite capacity with existing customers and its ability to enter into commercial relationships with new customers.

Customers

The company’s satellite capacity is used by its customers for a variety of applications, including:

Fixed Satellite Services (FSS): The company provides satellite services to broadcast news organizations, internet service providers and content providers who use its satellites to deliver programming and internet. The company’s satellites are also used for the transmission of live sporting events, internet access, disaster recovery and satellite news gathering services.

Government Services: The company provides satellite and technical services to the U.S. government service providers.

Network Services: The company provides satellite services to companies for private networks that allow delivery of video and data services for corporate communications. The company’s satellites can be used for point-to-point or point to multi-point communications.

Competition

The company’s ESS segment competes against larger, well-established satellite service companies, such as Intelsat S.A., SES S.A., Telesat and Eutelsat Communications S.A., in an industry that is characterized by long-term contracts and high costs for customers to change service providers.

Satellite Fleet

As of December 31, 2022, the company’s satellite fleet consisted of ten geosynchronous (GEO) satellites, seven of which are owned and three of which are leased. They are all in geosynchronous orbit, approximately 22,300 miles above the equator. The company’s EchoStar XXIV satellite is included in construction in progress as of December 31, 2022. The satellite is expected to be launched in the second quarter of 2023.

Strategy

The key elements of the company’s strategy are to focus on optimization of operations and product offerings; monetize its EchoStar XXIV satellite; strong focus on its enterprise business; continue development of S-band and other hybrid spectrum resources; continue to diversify its business by selectively exploring new domestic and international strategic initiatives; and develop improved and new technologies.

Government Regulations

The company is subject to telecommunications regulation by a number of regulatory bodies, including the Federal Communication Commission (FCC), other U.S. federal and state regulators, the International Telecommunication Union (ITU), and regulators in other countries and regions where the company holds licenses, including the E.U., the U.K., India, Australia and several Latin American countries.

Many of the services the company provides are also subject to FCC regulation as telecommunications services. For certain services in the U.S., the company is required to contribute fees, computed as a percentage of its revenue from telecommunications services to the Universal Service Fund (USF) to support mechanisms that subsidize the provision of services to low-income consumers, high-cost areas, schools, libraries and rural health care providers.

The orbital location and frequencies for the company’s satellites are subject to the frequency registration and coordination process of the ITU.

The U.S. and other jurisdictions in which the company licenses satellites are generally parties to the United Nations (UN) Convention on the Registration of Objects Launched into Outer Space, which requires a satellite’s launching state to register the satellite as a space object.

In the operation of the company’s business, it must comply with all applicable export control and trade sanctions laws and regulations of the U.S. and other countries. Applicable U.S. laws and regulations include the Arms Export Control Act, the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), and the trade sanctions laws and regulations administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

The export of certain hardware, technical data, and services relating to satellites and the supply of certain ground control equipment, technical data and services to non-U.S. persons or to destinations outside the U.S. is regulated by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) under the EAR. In addition, BIS regulates the company’s export of satellite communications network equipment to non-U.S. persons or to destinations outside of the U.S. The export of other items is regulated by the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) under the ITAR and is subject to strict export control and prior approval requirements.

The company is also subject to the Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions that generally prohibit companies and their intermediaries from making improper payments or giving or promising to give anything of value to foreign government officials and other individuals for the purpose of obtaining or retaining business or gaining a competitive advantage.

The company is subject to the requirements of federal, state, local and foreign environmental and occupational safety and health laws and regulations. These include laws regulating air emissions, waste-water discharge and waste management, most significantly the Resource Conservation and Recovery Act and the Emergency Planning and Community Right-to-Know Act (EPCRA). Under the Resource Conservation and Recovery Act, the company’s Hughes segment is considered a small quantity generator.

As required by the EPCRA, the company files annual reports with regulatory agencies covering four areas, such as Emergency Planning, Emergency Release, Hazardous Chemical Storage and Toxic Chemical Release Inventory. The company maintains small quantities of hazardous materials on its premises, and therefore, have relatively modest reporting requirements under the EPCRA. The company is also subject to the requirements of other environmental and occupational safety and health laws and regulations. Additionally, the company reviews the Superfund Amendments and Reauthorization Act Title III regulatory requirements and annually report quantities of onsite material storage using Tier II, state DEQ (Department of Environmental Quality) reporting systems.

Patents and Trademarks

The company holds the U.S. and foreign patents covering various aspects of its products and services. The duration of each of its U.S. patents is generally 20 years from the earliest filing date to which the patent has priority.

History

EchoStar Corporation was founded in 2007 as a corporation under the laws of the state of Nevada. The company was incorporated in 2007.

Country
Founded:
2007
IPO Date:
12/31/2007
ISIN Number:
I_US2787681061

Contact Details

Address:
100 Inverness Terrace East, Englewood, Colorado, 80112, United States
Phone Number
303-706-4000

Key Executives

CEO:
Akhavan-Malayeri, Hamid
CFO
Orban, Paul
COO:
Swieringa, John