Analysis: EchoStar network dream crashes and burns

EchoStar’s $23 billion deal to sell its 3.45GHz and 600MHz spectrum licences to AT&T marked the end of its long-standing ambition to be the fourth major mobile operator in the US.

Under the auspices of Dish Network, the concept of becoming the fourth network operator was borne out of T-Mobile US’ deal to buy Sprint in 2019. Dish Network agreed to pay $5 billion to acquire assets from both of those operators as part of a plan which was supposed to provide additional competition in the market.

After several delays, Dish Wireless launched its greenfield, open RAN network in Las Vegas in 2022.

The struggle bus had many stops as the company under the EchoStar brand faced a mounting debt load while also failing to find its footing in the MNO sector.

Matters came to a head in May when the Federal Communications Commission (FCC) called out EchoStar’s 5G network buildout and its AWS-4 spectrum licences after SpaceX questioned the latter’s use.

FCC chair Brendan Carr presented EchoStar co-founder and chair Charlie Ergen with his “best and final offer” following a meeting by both with President Donald Trump in June. Trump encouraged the two sides to reach a deal to help EchoStar avoid bankruptcy.

EchoStar stated in a filing the uncertainty over its spectrum rights effectively froze its ability to make decisions about its Boost Mobile phone business, including the build out of its 5G network.

EchoStar stated its spectrum deal with AT&T will result in it decommissioning elements of its open RAN network over time as it moves forward as a hybrid MNO using the latter’s network.

The deal with AT&T is expected to close in mid-2026. Roger Entner, founder and analyst at Recon Analytics, told Mobile World Live (MWL) it will likely gain regulatory approval after both Carr and Ergen met with Trump at the White House.

“This is de facto the end of the road as the fourth network operator,” he said.

Here’s a look at how the deal impacts EchoStar and AT&T.

Vendor fallout
Entner explained the decision to shutter the open RAN network impacts the vendors which were supporting the 5G service and buildout. Samsung struck a deal three years ago to provide radios and other gear for use on the 5G network.

“It probably effects Samsung the most,” Entner noted.

AvidThink founder and principal Roy Chua told MWL the decision to shut down the open RAN network made sense to ensure EchoStar can remain viable going forward.

“It’s unfortunate for the innovative technology platform they built with their partners and the overall open RAN movement,” he said. “It’s a negative for the vendors involved in powering the Boost RAN network, including Samsung, Mavenir and a host of other players.

“Unfortunate as well for Wind River, which just took over from Broadcom/VMware the OS/CaaS layer at the edge.”

He noted Amazon Web Services will most likely continue to host the Boost Mobile 5G core.

Government contracts
The future of EchoStar’s Open RAN Centre for Integration and Deployment (ORCID) faculty to test and validate components from various vendors on its 5G cloud-native network seems uncertain as does a $50 million grant from the US Department of Commerce’s National Telecommunications and Information Administration (NTIA) to help establish the centre.

Tower companies
LightShed analysts Walter Piecyk noted EchoStar’s net debt was $22 billion before it struck the deal with AT&T.

“Dish paid $13.5 billion for the spectrum now getting sold for $23 billion. There are likely other elements to this deal and tower counts look to decline not increase,” he said on X.

Indeed, MoffettNathanson senior MD Craig Moffett explained EchoStar is still saddled with roughly $15 billion in debt related to its tower lease agreements.

He noted the deal with AT&T provides a near-to-medium cushion for EchoStar to pay its tower leases.

Moffett said it also bodes well “for the thesis that EchoStar is now in full liquidation mode”.

“More spectrum sales will surely follow,” he stated. “The likelihood of EchoStar remaining a facilities-based carrier are dwindling.”

Satellite play
In the face of a possible bankruptcy filing, EchoStar announced earlier this month it reached an agreement with MDA Space to build low Earth orbit (LEO) birds for a new non-terrestrial network (NTN) for its direct-to-device (D2D) satellite constellation.

EchoStar stated the delivery of satellites is planned for 2028 with a commercial service starting the following year. It estimates the total cost of the LEO constellation is comprised of a one-time investment of $5 billion.

Tim Farrar, an analyst at TMF Associates, explained to MWL EchoStar could use some of the money from the AT&T deal to build its satellite constellation.

Farrar stated in a research note it is doubtful Ergen views D2D as a major opportunity and instead is more focused on building a network to fend off the spectrum challenge from SpaceX’s Starlink and preserve exclusivity in the AWS-4 spectrum within the US.

“As such, we remain doubtful that EchoStar will ultimately invest the full $5 billion required for 200 satellites, and instead near term contract commitments, such as for launch, will focus on the initial 100 satellite constellation and an investment of $2 billion to $2.5 billion.”

Entner also doesn’t see EchoStar making a D2D play.

“With AST SpaceMobile, Kuiper and Starlink, how many competing satellite systems do we need? Charlie Ergen investing more money in satellite-based communications is throwing good money after bad money.”

AT&T
AT&T stated the addition of EchoStar’s spectrum will enable it to offer its fixed wireless access (FWA) service in more areas where it currently does not have fibre.

Compared to rivals Verizon and T-Mobile, AT&T’s FWA rollout has been slower to date, but it could be more aggressive with the new spectrum in hand.

Entner stated combining FWA with AT&T prepaid brand Cricket Wireless will “go at the jugular” vein of cable operators.

He said the spectrum deal also allows AT&T “to play offence in a lot more places and a lot more markets” while also transforming “a good enough network into a real contender”.

Moffett views the spectrum deal as “incremental negative” and noted the additional debt AT&T will incur “yields little to no incremental revenue”.

He also stated AT&T’s decision to continue its share repurchase programme instead of prioritising debt reduction related to the deal “doesn’t leave much margin for error”.