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Jonathan Chaplin
  • Jonathan Chaplin

EchoStar amends DBS exchange offer

EchoStar has increased its offer to exchange certain DBS notes for new DTV notes by $0.06-$0.065, lowering the discount by about $70MM from $1.568BN to $1.499BN. We have no idea whether this is an output of discussions between bondholders and the company or whether the company is doing this unilaterally. Either way, improving the terms increases the odds of the exchange going through. Our base case remains that the deal is in the best interest of all parties and will ultimately be done.

Jonathan Chaplin
  • Jonathan Chaplin

What does a failed spectrum auction mean for Dish

T-Mobile announced at earnings that they had failed to find a bidder for their 800MHz licenses. In this brief note we walk through what this might mean for spectrum values generally, and for Dish / EchoStar’s spectrum in particular.

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.

Jonathan Chaplin
  • Jonathan Chaplin

US Cellular Sells 850MHz Licenses to Verizon

US Cellular has sold its cellular licenses in the 850MHz band, as well as a handful of AWS and PCS licenses, to Verizon for $1 billion. The transaction isn’t a surprise; we have been expecting USM to sell all their assets (USM and TDS have been our favorite small ideas). The price was higher than expected. In this note we briefly cover implications for USM, TDS, EchoStar, and spectrum values more broadly.

Blair Levin
  • 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.

EchoStar Corporation: DISH DBS sale or debt exchange and capital raise...

Pending early November outcomes of DISH DBS & DISH debt exchanges, capital raises & following likely distressed exchange designations, EchoStar will undergo a formal review process.

Blair Levin
  • 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
  • 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.

Dave Nicoski ... (+2)
  • Dave Nicoski
  • Ross LaDuke

Vital Signs: Actionable charts

In this product we rank the most positive and negative domestic stocks, filter the symbols by market-cap and trading volume, and then divide the companies into sectors and groups. We then manually look through charts leadership/changes, bottoms-up/top-down ideas, short-term patterns that may have long-term significance, etc. We believe you will find this product valuable as significant price and relative moves begin in the daily charts.

Blair Levin
  • 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
  • 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.

Russell Waller
  • Russell Waller

Odido CFO call meeting notes: Interesting read across for KPN/Vod-Zigg...

We recently had a call with Odido CFO, Gero Niemeyer, and we provide feedback in this report. Our key take-away is that Odido is negotiating with ODF to increase the share it buys up to 40% from 20%.

Blair Levin
  • 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
  • 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
  • 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
  • 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
  • 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

DISH / DTV merger talks on again?

Bloomberg reported that the companies are in early-stage talks. We suspect the story is credible. We have always regarded this deal as likely (even inevitable). There are good reasons why both sides may be motivated to transact now.

Russell Waller
  • Russell Waller

Odido Q2 24: Fixed going from strength to strength, but mobile laggi...

The fixed business continues to perform well for Odido, but the same can not be said for mobile, where subs growth is now negative, and MSR growth is close to zero. In aggregate, SR has declined again to +3.1% y/y (MSR +0.1% and FSR +11.9% y/y) from +3.9% y/y. Odido is doing a good job of converting the SR into EBITDA growth, but the lack of ARPU and MSR growth is a bit of a concern.

Jonathan Chaplin
  • Jonathan Chaplin

SATS: Model Update

We have updated our EchoStar model following the filing of all four 10-Q’s last week. The changes are modest, and we continue to see the company funded through November 14th. We run through the major intercompany cash movements in 2Q24, and the most likely path to raising Capital if a holistic solution that raises new cash, pushes out maturities, and lowers debt outstanding can’t be negotiated before November 14th

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