EchoStar Pivoting to 'Hybrid MVNO' Model Following Spectrum Sales

Speaking Monday at the World Space Business Week in Paris, Akhavan and Chairman Charlie Ergen repeatedly said EchoStar's new focus was a response to the FCC deciding to bring EchoStar spectrum to use sooner. "This was a forced situation for us," Akhavan said. Ergen added that EchoStar's current position "is not exactly where we wanted to go."

The presentation was the company's first major public event since it announced sales in recent weeks of its 3.45 GHz and 600 MHz spectrum licenses to AT&T and its AWS-4 and H-block licenses to SpaceX (see 2509080052).

Ergen said EchoStar could have successfully fought the FCC's twin probes, but that would have been a case of "win the battle, lose the war." EchoStar's terrestrial network plans were essentially frozen indefinitely during the proceeding, he said. The AT&T and SpaceX spectrum sales were the "only ... logical path." The agency began proceedings in May to investigate how much the company was using the 2 GHz band, which includes AWS-4, for mobile satellite service and to examine the deadline extensions EchoStar received for its 5G network buildout (see 2505130003).

Under the hybrid MVNO approach, Boost will be more competitive than it has been because the costs of running the network were so large, Ergen said. Now, Boost will be cash-rich and asset-light, he added. Akhavan argued that Boost can still be a challenger in the mobile marketplace both because of its cost structure and because its cloud-based network will let it readily churn out new products and services. Nothing in the AT&T spectrum deal stops it from being that competitor, he said.

Ergen said that while EchoStar had thought the open radio access network aspect of its terrestrial mobile network would end up being its key quality, the fact that it's cloud-based has turned out to be more significant.

Akhavan also talked up the prospects for EchoStar's other lines of business, noting that its Hughes subsidiary began pivoting three years ago from a focus on consumer broadband to enterprise customers such as airlines. That pivot came as the growth of competition in low earth orbit satellite and fixed-wireless access was causing EchoStar's residential customers to switch. He said Hughes is now close to 50% enterprise revenue and will be a primarily enterprise company within a couple of years.

Akhavan said Dish Network has exceedingly low churn among subscribers. Asked about the possibility of Dish and DirecTV again discussing a merger or acquisition, Akhavan said Dish "will always explore opportunities" with the rival direct broadcast satellite operator.

Recon Analytics' Roger Entner wrote Monday on X that Ergen "built a 'mirage network': massive spectrum holdings, minimal buildout, then profit extraction through asset sales." Ergen "played [SpaceX] perfectly," with the satellite operator grossly overpaying for spectrum, Entner said, but his wireless strategy failed at sales. "He built a 'miraculous 5g stand alone core network,' but couldn't sell service. Was it all a mirage designed to offload spectrum?"

In an interview with Policyband published Monday, FCC Chairman Brendan Carr said one of his priorities has been ensuring the "highest and best use" of spectrum, and EchoStar is an example of entities "that are holding spectrum that don't necessarily have it fully loaded." Carr said the SpaceX and AT&T transactions "hold the potential to be a real significant game changer," with AT&T gaining additional capacity and SpaceX helping lead the U.S. in D2D service.