reports
- Jonathan Chaplin
SATS: a thought on the debt exchange
In this note we show how there is at least $0.7BN of additional value on the table that could help narrow the discount DBS bondholders are being asked to accept in order to get the DTV deal across the goal line. We also run through the differences between the four segments EchoStar reports at earnings and the four filing entities they disclose to the SEC. We also update our estimates for DBS, Dish Networks and Hughes now that their 10-Q’s have been filed.
- Jonathan Chaplin
- Jonathan Chaplin
EchoStar: Value increases following transactions (but takes longer to ...
We have updated our model for the sale of DBS and increased investment in network infrastructure and subscriber growth following the capital raise. We have also updated spectrum values for recent transactions. We are more confident than ever in the value that will be realized if spectrum is sold, though the timing of a sale has likely been pushed out. Dish could build a business that is as valuable as the spectrum, but it is tough to have confidence in this.
- Blair Levin
NSR Policy: Implications of Multiple Mergers at the FCC
It appears likely that within a few months, multiple transactions—TMUS buying US Cellular, VZ buying Frontier, and DISH and DirecTV merging—will be pending at the FCC. The transactions involve all four, or three (depending on how you think about it) of the national facilities based mobile carriers. Investors have asked, how will the presence of multiple transactions affect the process of approval for each other? We address that question in this note.
- Blair Levin
NSR Policy: What We Learned from the DBS Deal Announcements
The big news yesterday was the announcement of a series of deals related to EchoStar, DirecTV, TPG and AT&T. Our colleagues have put out a series of notes relating to what we learned on the financial front. In this quick note we review what we learned on the antitrust/regulatory front.
- Jonathan Chaplin
EchoStar transactions – they did it!
A couple of quarters ago, Dish set out to lower debt outstanding, extend maturities on the debt that remained, and put new cash on the balance sheet. They had a deadline of November 2024, when $2BN of debt at DBS matured. As we approached the deadline, investors were growing increasingly skeptical that it could be done. They did it all, and they wrapped a sale of DBS into the process. Our thoughts on the deals and the implications for EchoStar and the broader industry in this note.
- Blair Levin
NSR Policy: Rural Areas and the DBS Merger
One issue that keeps coming up is how the government will assess the competitive impact of the DBS merger on rural areas. A New York Times article this weekend summarized the concern many have raised. In this note, we assess what the article got right and what it missed.
- Jonathan Chaplin
Dish / DTV reportedly close to a deal
Bloomberg and the WSJ both reported this afternoon that the companies are close to a deal. They claim an announcement could come by Monday. The only new data points that we picked up were that DTV is the acquirer, and AT&T and TPG will remain investors (and presumably remain in control). In addition, the stories claim that Sling will be part of the sale.
- Blair Levin
NSR Policy: The DBS Deal and the 12 GHz Band
While investors contemplate the financial implications and regulatory prospects of a potential DISH/DirecTV deal, one generally overlooked element of the transaction is the role the 12 GHz band could play in the value creation through the deal. In this note we analyze that potential which could be more disruptive to the market than generally understood; stated differently, the value of the deal could be more about spectrum than synergy.
- Jonathan Chaplin
Dish ends negotiations with DBS creditors
Dish filed an 8-K this morning stating that its negotiations with DBS creditors had concluded without reaching an agreement about any transactions. The negotiations were about exchanging certain DBS notes for new secured debt and raising new capital. The company says it remains in discussions with various other parties about possible financing transactions.
- Jonathan Chaplin
Dish seeks build extension (that we think they'll get)
Blair put out a note on Dish’s request for an extension of the buildout deadline. Blair argues that the FCC is likely to agree to the extension. If they do, it will be material for both the credit and the equity. Blair’s note is a must read for anyone involved. We provide some additional quick thoughts here.
- Blair Levin
NSR Policy Quick Take: DISH Seeks FCC Adjustments to Build Out
DISH just filed a letter with the FCC seeking to modify their June 2025 buildout requirements in exchange for accelerated deployments in certain markets and other commitments. It argues that its new framework “will undoubtedly benefit consumers…. (helping) sustain EchoStar’s presence as a nationwide facilities-based wireless provider, enabling Americans to be able to take advantage of innovative new technologies and competition in the wireless market (which in turn will lead to lower prices). T...
- Blair Levin
NSR Policy: The Prospects for a DBS Merger Review: This Time It Actual...
Last Thursday, the New York Times ran a story any investor in media could have written several years ago headlined “Satellite TV Is in Trouble. DirecTV’s Dispute with Disney Shows Why: While the Cable TV Business is Declining Quickly, Satellite TV is Decaying Even Faster.”
- Jonathan Chaplin
- Jonathan Chaplin
The FWA Capacity Report Series, Volume III The cost of adding capacit...
in this report we show that FWA customers are valuable when added to a network with fallow capacity, but they don’t cover their cost if capacity must be added to the network to support them. This follows two prior reports that established that the carriers have enough fallow capacity to support just over 10% of households. Together these reports settle the biggest debate affecting broadband stocks.
- Jonathan Chaplin
SATS 2Q24 Quick Take: FCF beat; big questions still unresolved
Operating trends were ok. EBITDA and FCF beat consensus expectations (EBITDA by a little; FCF by a lot). The cash balance ended lower than we expected, but largely due to the timing of receipts from asset sales (plus some opportunistic debt repurchases).
- Jonathan Chaplin
The FWA Capacity Report Series, Volume III: Wireless carriers may incr...
We published an important report that calculates the FWA capacity of mobile operators using fallow capacity. The analysis relied on the usage of consumer subs; we later learned that businesses use far less data than consumers. The mobile operators can support more total FWA subs than we previously calculated, though fewer consumer subs. An increase in FWA targets for business users is good for the mobile operators while being immaterial to Fiber and Cable operators.
- Blair Levin
NSR Policy: What the Congressional FCC Hearing Taught Us and What the ...
Last week, the House Communications Subcommittee had an oversight hearing at which the FCC Chair and all the Commissioners were witnesses. The issues that we were able to learn more about included the 4.9 GHz dispute, bulk billing, and whether a Democratic FCC would attempt to pre-empt the New York State law mandating a low-income broadband offering.
- Blair Levin
A Midsummer Night’s Policy Update: Spectrum, ACP, and USF
In this midsummer night’s update, we review what has happened in the last few weeks on policies that could have a material impact on telecom and media stocks. First, we look at efforts related to spectrum, the Affordable Connectivity Program (ACP), and the Universal Service Fund (USF) where, in this Congress, the policy efforts have become intertwined. On spectrum, the deadlock continues to prevent reform efforts moving forward. On an ACP extension, there is continued momentum but not enough t...
- Jonathan Chaplin
1Q24 Wireless Trends
We have updated NPS and industry trends for the latest quarter of data. Customer growth has settled in a tight range of 2%+. Revenue per customer accelerated, driving an uptick in service revenue and EBITDA growth for the group. NPS trends continue to improve for the wireless industry, with Dish now leading the pack. We run through thoughts on both trends in this note.
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