EchoStar, in its recent results, highlighted its best performance in five quarters, reporting EBITDA that was ~9 per cent above consensus. Revenues were basically flat (but ~3 per cent above consensus), as equipment revenues grew 43 per cent, offset by a 7.6 per cent decline in service revenues (primarily consumer-based at Hughes Network).

On March 9th, Hughes confirmed it had been picked as a major supplier to Stargroup’s Mexican cellular network and selected the Hughes Jupiter System and managed satellite broadband to extend LTE service to customers in rural communities.

However, Quilty Analytics suggests that helped by the boom in equipment sales for EchoStar’s Hughes Network subsidiary and driven by “strong cross-geography” enterprise demand as well as the ongoing rollout of OneWeb gateways could combine to lead to a major step for the Charlie Ergen-owned business.

“While still 6+ months on the horizon, OneWeb’s service launch should provide a boost to equipment sales and services, particularly in India, for Hughes,” says Quilty.

Quilty looks ahead to 2024 and forecasts that it expects Hughes to add 180,000 subscribers and which will help compensate for losses of 368,000 subs over the past two years.

First, however, EchoStar has to see its giant Jupiter 3 rocket launched during Q2 and start work in Q3. But Quilty’s study on EchoStar’s formal 10K disclosure document which itself talks – again – that the company is evaluating “whether and to what extent” to replace its satellite fleet, and that it may require material capex to make “significant” acquisitions.

EchoStar’s document is plain, and says: “in addition, our future capex [is] likely to increase if we make acquisitions”. Quilty says: “EchoStar remains one of the best-capitalized companies in the industry with a multi-billion dollar borrowing capability should it pursue “significant” acquisitions.”

EchoStar is committed to launching an S-band constellation, initially in Europe, where the S-band service is supplied by the EchoStar-21 satellite.

Other posts by Chris Forrester:

1. Virgin Galactic in stock split
2. Thuraya-3 suffers major problem
3. AST SpaceMobile hit by Class Action
4. Optimism under threat at SES
5. Rivada visits Terran Orbital’s manufacturing HQ
6. Avanti wins spectrum debt obligation case
7. SpaceX breaks records for re-use launchers
8. IRIS2 already in trouble?
9. Intelsat contemplates next steps

Categories: Blogs, Inside Satellite

Tags: Echostar, Hughes, Quilty Analytics