EchoStar Corporation (NASDAQ:SATS) Q4 2023 Earnings Call Transcript

Page 2 of 2

Now, let me bring you to the first part of your question, which was what are you going to do in 20. Look, I see 2024, but any other new brand new mobile business that I have seen or launched and I have many of those is a transition year where you gear the business for success. Now, any number that shows up upfront because of the small number here, small number — it could skew your model in a very strange way. It’s not a year to build a model on and it’s not a year that we want to put a very static number. This is not a business on a steady state. We’re going to go to market. We’ve got to throw something out there. We’re going to be disruptive here there to see what works. Sometimes put something in the market is not great and you kind of regear it, it becomes great.

I’m really excited about like the one thing that I want to emphasize here, and I stand behind the network is awesome. It is awesome. I just can’t speak to how great it is, plus the fact that you got the national roaming on the top of two other networks. I mean, I just can’t imagine anybody not seeing that as a differentiated, it has never happened in the history of mobile never. Nobody has had this never — nobody has had national enrollment is the first time. And we like to use that. And I think that’s — that removes also to limitations from my perspective in terms of our go to market. But it’s not the year that I can give you a static forecast. So please give me a year to figure out what which ends up and how we are going to maximize our market performance.

But you’re going to see installments. I’m not also reducing expectation to the point that you’re not going to see us at all this year. It’s just not yet to build a model on. Give me a year, help you build a model next year.

Ben Swinburne: Okay. And then I just was curious, as I mentioned in the K, I think there’s a third test sort of that still needs to be finalized for the 2023 spectrum sort of FCC milestones that I think — I think it says you have to finish that drive test this month. I just want to make sure that, that’s nothing we should be thinking about as a risk. And then I was lastly, just going to ask a bit of a random one, Hamid, one of the partners that we’ve all focused over the years has been Amazon as again, with your fresh eyes sort of surveying the relationship that DISH has, anything you would call out there that you think is interesting or underappreciated? Or is that another one we shouldn’t be thinking about much in 2024?

John Swieringa: This is John. As it relates to the drive testing, we’re on track with that, and we’re getting ready to submit I wouldn’t put any extra risk factors on that.

Ben Swinburne: Okay.

John Swieringa: Beyond what we’ve already disclosed.

Hamid Akhavan: So commenting on Amazon, we see Amazon — I see personally Amazon as a very strategic partner, and I think they see it the same way. I don’t want to speak on their behalf, but that’s what we sense. We are excited about our work together. I think they’ve given us an incredible amount of attention and help, and we’re working with them and Anglo, and we are very excited about it. I mean we’re jointly committed to making sure offerings so we have on Amazon, meet the Amazon experience, which I’d like to have — look, I’d like to have the Amazon experience, not the mobile come online or any other experience. I mean that’s one of the goals we have, and we’re not going to compromise on that. And that’s, again, another one of those things that I said, we want to make sure we get it right, but we have all the support we need from Amazon. So delighted with the relationship there, very good relationship.

Ben Swinburne: Thank you so much.

Operator: Our next question comes from the line of Tom Ledtey [ph] with Citadel. Please proceed with your question.

Unidentified Analyst: Thank you for taking my call. Two years ago at the same call for the year-end 2021, Charlie talked about your abilities to be very mathematical. And the network is built primarily for the enterprise and government solutions. I was wondering if you could talk a little bit about where we have success there and what you see in the near future from that since we seem to be focused on the call here with consumer wireless?

Hamid Akhavan: So let me — this is not sure 100% whether I will hit the mark on answering your question, because it’s a bit of a broad question. But we see a great potential in our enterprise. And part of that enterprise is the governments. Look, at the Hughes and now the broadband portion of our segment of our business at EchoStar now, we do have a relationship with and business with the partner of defense and government in multiple entities there. We see incredible opportunities there. In fact, towing that opportunity to the 5G, which we have demonstrated in a couple of places, we demonstrated that in a space in — with the island, and we got a second base as a result of that. And that’s become a showcase. We also won award from the government or key project of $50 million.

We see that there’s a significant amount of interest in the DoD government enterprise related to that. But I want to say that these things, as you’re well aware, in the enterprise business, you work for quite a while before you get a Monster’s contract. Paul Gaske mentioned in our — in his remarks that Delta Airlines, you had a massive booking that was a word for 1.5 years. It’s actually taking before you get something like that. But in the enterprise, when you get it, it significantly overshadows anything you can do in a consumer. So we’re going to be focused on both. I want to make sure that people know in the shorter-term, while we’re working in parallel to develop our enterprise business, government business, make 5G and O-RAN the differentiator in that space, which it is, we’re going to feed ourselves using the consumer.

So we’re going to do both. And the future will tell us how — what the mix will be, but we are excited about the enterprise opportunities.

Paul Gaske: Operator, I think we’ll take one more question before wrapping up.

Operator: Thank you. Our final question will come from the line of Michael Rollins with Citi. Please proceed with your question.

Michael Rollins: Thanks. Just wanted to follow-up, Hamid, on some of the comments that you’re making about the focus for the mobile business on creating a competitive offering. Are there mobile spectrum bands that EchoStar holds that you now view are no longer necessary to that competitive commercial strategy and could be monetized as part of this long-term funding plan. And then the second thing, just back to your earlier comments around the build requirements. Do the comments infer that you may want to ask for a delay from the FCC, so you could achieve some of the competitive in commercial objectives that you were sharing with us previously? Thanks.

Hamid Akhavan: So regarding the spectrum band, spectrum bands are all different, and you’re going to need more of over time as you grow. You may not need all of them upfront. You may need to in different markets in different ways. Every spectrum band has a use that is specific to a certain need you may have at certain times. So, I cannot give you a specific answer, what a spectrum we’re going to need at one point. But they all will come useful at some stage in your life of a business. And ultimately, when you are around 50 years into the business, you’re going to need every spectrum band in every geography. But on the way there, you have plenty of flexibility to adjust your spectrum in a way that best is monetized for you at that stage in your life.

So, I don’t find myself in a position — we don’t find ourselves in a position that we are tied to a very specific recipe or ownership of the spectrums that make us — we can be successful in many, many ways using the spectrum we have. And we have plenty of spectrum far more than I need at this moment. So, we’re all good. And as it comes to our interactions with the FCC, I generally don’t like to comment on any activities regarding the FCC. We take all of our applications very seriously and intend to meet every one of our obligations. But I refrain from making any comments — detailed comments regarding the FCC for obvious reasons.

Michael Rollins: And just one last — if I could just one last one. And just given that in terms of what you just described on the commitments, can you just give us an update of just assuming that you have the funding, how many more sites and how much more in terms of dollars is needed, do you believe to satisfy all the requirements and just put this whole question behind you?

Paul Orban: Yes. We don’t disclose that, but we will have ample capital to hit the requirements, if we’re able to raise money, so.

Hamid Akhavan: Yes. And as you know, you could build the sites in many different ways. You size for capacity, for coverage, there’s always that. So, it’s really not — it’s more of an arcane science. So, our engineers would have to look at that. And for that reason, it doesn’t really make sense to put a number out there. But as Paul said, we have enough resources. We would have enough resources to meet that obligation.

Hamid Akhavan: I want to thank everyone for participation. I think we had a different format. We took some time upfront. But I hopefully, that time was useful to answer some of these questions. So, the Q&A did not have to be as long. With that, thank you very much, and hopefully, we’ll see you on the next earnings call.

Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

Follow Echostar Corp (NASDAQ:SATS)

Page 2 of 2