EchoStar warns of slow future
October 25, 2012
By Chris Forrester
On November 6th, Denver-based EchoStar will unveil its Q3 results, but already CEO Charlie Ergen is cautioning investors not to expect too much in the future from EchoStar, especially as far as the company’s investment in wireless spectrum is concerned.
EchoStar is awaiting for permission for its sister company Dish to offer internet access to its existing portfolio of pay-TV services. Ergen told Bloomberg’s BusinessWeek that partnering with an established wireless player is a key part of his strategy. However, recent deals between Japan’s Softbank and Sprint Nextel, and Deutsche Telekom/T-Mobile and MetroPCS means “those four possible partners are now off the market,” said Ergen.
“If the timing is too soon, you spend a lot of money and sometimes you run out. If timing is too late, the market runs away from you,” Ergen, 59, said in an interview with Bloomberg. “There always has to be an option to exit the business if we’re not able to get into the business on time, and that window is closing.”
But the delay is costing Egren’s businesses money. Nobody is even willing to talk partnerships with him until the authorities give a clear ruling on whether he can use his satellites in partnership with a terrestrial wireless service. His applications have now been with the FCC for 18 months, he explained. Ergen paid $1.4 billion to buy spectrum from DBSD North America, and further spectrum from bankrupt TerreStar Networks. The FCC is expected to rule by year-end.
Of course, Ergen might surprise the market by permitting Dish Network, his pay-TV business, to merge with market-leader DirecTV. This is much speculated about, and should not be ruled out of the equation as to possible scenarios