SATS - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the EchoStar Earnings Conference Call for Second Quarter of 2020. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Mr. Terry Brown. Thank you, sir. Please go ahead.

Terry Brown

operator. you, Thank and second everybody, our call earnings Good of welcome XXXX. the quarter for morning, to I'm by Pradman CEO; and Manson, Dave Hughes; joined General Dugan, Johnson, President Rayner, Mike today Anders Services; COO Charlie of Ergen, Counsel. EchoStar and and Strategy CFO; Chief Kaul, Satellite of Chairman; President Officer our Dean our

in As invite media identify mode and call, the you usual, to not listen-only we ask or participants your firms other on participate in report. that a

allow not respect. do We which you recording, also ask that audio we

Let Dean me now for the turn this over safe to harbor disclosure.

Dean Manson

results we implied Thanks, and be Terry. uncertainties involve by historical from All or other during from materially statements statements and fact, known make other historical factors statements future different constitute that to forward-looking results and than expressed actual results the of that risks, call any statements. could unknown forward-looking this our cause

risks, on understood on we to filed we they a applicable factors wherever refer All cautionary be the our list make Report forward-looking any to Quarterly being please make appear. and statements during Report and call Annual Form the XX-K SEC. should those of as with For statements XX-Q Form

consider hope today, and we you Dean. safe everybody, Thanks, and us and not no on are the much, the Dugan. very in You should call turn over any to now undue for and any call should forward-looking Thank Mike the for described carefully updating joining reports your place forward-looking our healthy. responsibility statements. in risks assume reliance any We still statements. you I'll family

need connected service, applications. education vital EchoStar we from them information, entertainment, team. was business it complexity, us With to the COVID quarter unusual and kept the When most, customers the social, medical, our an

uncertain had Although the these continued to our help we demand preserve our remain implement margins also to during services times. savings strong, cost to initiated very for

up and effectively employees top and We our of innovation and health safety our happy. productivity are priority placing engineering maintaining of pace also all keeping on while of customers keeping the protecting our

the to over it turn management now me team. Let

up. you're Pradman, First,

Pradman Kaul

Thank foreign over the an X.XXX all EBITDA for we who was in uncertainty year. year. subscriber HughesNet while including adjusted you, the stay XX% by by The driven our and filing approximately by also had headwinds QX, adjusted And XX% to COVID And bankruptcy America. grew to experience pandemic, subscribers Mike. margin managing operating EBITDA ones capacity. last the full providing continue of grew second XX,XXX, million is XX% in XXX,XXX Despite the compared quarter with Hughes exchange customer approximately our US QX we ending outstanding base churn. Much network Latin at on focused subscribers, last

will in expiration half we With pledge of second with more continued normalized activity the the the sales on year. U.S. strong resume FCC ARPUs the of XXth, June

continue expect in also international growth to We consumer our markets. subscriber

each company activity been had new was with activity on a in activity April lot the discussions delayed. Regarding launched QX will and sites. restaurant We've to our normal had catching and in providers. installation of a satellite due lower on of and recovering including and impact enterprise the Jupiter business. engaged retail active launch we COVID-XX up North expect American thousands June recently, but currently activity are with our in saw that be XXXX, Switching X multi-brand a half customers, second in are also we still by the of contract program, than we to May the chain,

are retail pump. the in upgrading their credit with networks In petroleum to cards addition, accept the chip technology space customers at

existing upgrade hubs center technology. of to their systems to two to We a contract also operation secured Jupiter sell with network Telesat

We've signed in the have that line. four also pleased Initial in deployed been service India communication On regional industries. for broadband Coast with a are new several banking announce service we international customers to contracts with KU Indian the enterprise companies. large along shipping awards and maritime side, the petroleum,

the broadband As facto many has Hotspot X cellular has is subscribers. Philippines, today, community in X,XXX of System XG of satellite de their to XXX And that Telefonica us to its their are we selected million broadband Also using Peru backhaul you Jupiter an know, to pleased TV in announce additional the the enable Jupiter expanded systems. already SpeedCash Cignal And the System for service add satellite the network locations locations. Wifi to is by project. standard Philippines to world's

Government momentum. & continues Defense build to Our business

with addressing the significant opportunities activity partners have administration. social security with We in

aboard two in through-the-rotor that agreed principal UK of very also We to the helicopter. Hawk had of successful the our bankruptcy. announced demonstrations OneWeb consortium and the we Bharti join from purchasing have capability We Black week blade Enterprises HeloSat Government last

areas. The high-speed limited GEO most the viable government cost the continue deliver in can our we backhaul, satellite be high networks access. the believe verticals, increase especially complemented our investor for We of with are about a satellites involvement areas services synergies low for OneWeb underserved cost as initially lowest our effectively possible cellular well structure, markets. as market as and excited be in business as hybrid become will to size the this wherever of enterprise capacity as the focus complex strategic industry including combination terrestrial or norm as by at LEO distribution continuing LEOs partner. networks the ahead in and will MEO We unserved and an see serving coverage customers hybrid many and maritime of low technology LEO significantly. ubiquitous on can In while latency, address satellites connectivity. well in needed, GEO GEOs terrestrial bring technology and of aero, applications near-term We low-density

lowest top cost in to not possible We also GEOs the expect latency maintain its is significant a markets priority. where edge

services, related which denser the short. fixed a high-speed monitor service and clearly Opportunity blocks. Digital census The Rural to continue option extent RDOF, wireless lower fiber FCC's to to for incentives and advantages We in the latency Fund, provides activity lesser for

Given use household that that cost I believe for these high with build-out the technologies, markets remain the Phase density service. will modest associated we funding lower

to do we this we filed For we participate and the material Phase serving bidding, to I see have of negative the target our impact RDOF to an potential funding. low-density expected challenges technology ultimately October the market We due application Despite in XXXX. if secure areas. the bias not in which any of cost size reason, begin economic is upside the anticipate to can

LEOs markets, to and a offerings in GEO the the to opportunity for I'm capacity service favorable RDOF has on performance low-density Although advantage positioning economic with potentially the Overall, offering OneWeb the rules. have we Based GEO our pleased augment subsidize and announcement, due the now the LEO very in our over could market outlook. program rural RDOF our more recent funding. latency

we consumer the Our resilient, this during pandemic, diverse business and has strong. slowed both remained And our recovery the enterprise it's in of second and although half in anticipate business XXXX. and year

the opportunities of about it excited as all with business continues evolve. are our aspects to associated We

me to now over hand Let Anders.

Anders Johnson

$X Thanks, and QX Pradman, year. last good continuing up was ESS QX, of operations million, morning. from slightly In revenue

opportunities capacity We to conditions. to during economic challenging pursue excess these our lease continue

to satellites gratified development to activities interest new delayed year. range of we supporting the S-band rescheduled front, the been quarter pair continuing, a are launches the for third from due vertical of EchoStar our are and pandemic, of the global Business Global see the Global EchoStar have for of first players lot our a On subsidiary this mission. of

of proof-of-concept EchoStar our and pandemic services are verticals to activities subsidiary, travel eased, up, we for to appetite European of in back emerging as Our its integration. Mobile, application autonomous also restrictions platforms XG strong are and MSS such have a as see the interest lot and continues new seeing products technologies ramping

I'll remains longer-term to S-band strategic explore our goal, to As XG Dave. into authorizations now turn over to it into complementary networks these always, ground full ways and continue our services other integration and component integrate of satellite we developments.

David Rayner

Anders. you, Thank

million, last QX as increase as in increases revenue the was QX transferred enterprise million second $XX $XXX Hughes in year, foreign adjusted exchange negative OneWeb The growth corporate As and were consumer as in reduced our contributors transaction. sales quarters, measurement. other from financial to foreign slightly equity million, in million. flat an in and believe Hughes the affiliates. will domestic to about from to release. consumer $XXX more G&A decreased to consumer the as EBITDA compared primarily was represents losses period revenue, the Consolidated was QX non-GAAP last exchange. last previous Corporate on quarter excludes revenue in reconciliation lower million, being last well Consolidated lower of other of lower year as over gains approximately BFS and growth revenue of adjusted efficiency losses in gains performance. EBITDA and of year. while in same year. large of and investments ESS impact last was year increase. spend items and million sales, are in estate same EBITDA losses and to adjusted was adjusted slightly to revenue the equipment lower an services. spend year. margin associated be the domestic in relatively our the strong the despite marketing due of result service closely quarter More service the operating in The offset The our our from speaking last We $X details and driven period GAAP second lower Hughes international than $XXX was bankruptcy on to earnings on DISH $X increase and with and our impact certain certain by EBITDA real the XX% main $XXX of up I million, EBITDA and million, the nonrecurring was $XX unrealized measurement a revenue in slightly part that the higher by

Capital the $XX good to $XX offset primarily million was the of QX from The in CPE, in related by higher in QX loss the economic million year. to quarter spend I'll that, with investments the growth, last turn change uncertainty explore to to by net us conditions $XX million current present. million income, loss Our both and Mike. operating to that flexibility about compared inorganic. largest compared spend, $XXX adjusted partially We back our $XX $X million gains opportunities in $X.X as with of consumer on cash, securities. decrease continuing Free ended were of last versus $XX higher feel provision $XX part CapEx cash due cash million last defined the during marketable income satellite was growth the flow, business. an a quarter minus million. our billion by lower it year. investment on in in of tax It And million of and The expenditures the balance lower foster offset EBITDA in affords $XX very driven with components was and cash given organic increase operations were million equivalents quarter over We year.

Mike Dugan

Dave. I'm proud you, was everything Thank about very earlier. of talked that

business XXXX, the managing During carefully manner, of looking the remain second and construction and X additional the operating we focused in Jupiter half growth satellite a prudent on for of opportunities. our will existing delivery

the to of the connectivity challenges pandemic, adapt the global need for communications. continue and to We affirmed COVID-XX which has

me turn our operator to session. back Let to now it the Q&A start

Operator

Our first of line with from question the Raymond Instructions] Ric [Operator comes Prentiss James.

Ric Prentiss

your a the both wireless, it's could on to future. years with beyond maybe he two take it moving hear EchoStar? for you're the EchoStar Inmarsat on about last XG. today, out you guys. But for think update time fits the lot when How through an and being maybe your, is the doing opportunity into and talked on the COVID-XX call, morning, business-wise. Good the you I of appreciate vision DISH you since Question us to pandemic see call at playing I'm I things glad into been well Charlie. progress offer, TV pay Thanks. personally how

Charlie Ergen

pandemic we've access that's to Okay. place a Thanks all broadband needs so that, a the to for shown picture been And related connectivity the And world in is a big we're connectivity and the the go. where question. that primarily company. has mean, is I us and that, obviously satellite necessity.

around that's positioned. well and So, world, and so the is EchoStar

of with do it world fault, in may a a that years. some positioned take to, in I big think with the $X.X strong picture a internally greater some within we well challenged positioned variety opportunities. of opportunities don't I a to maybe strongest community, to the exist, is, almost advantage at and will that. no methodologies. satellite of been are debt to think continue the of broadband And We've emphasis on of and now company, net that we're to patient the business we balance to down of as sheet, cash, businesses the the through but our balance going billion extent where, least can be well, side path, the industry, but one forward for be a We're well several grow and move sheets in

stronger that You which of frequency, which much will connect as was out challenging with comes come a see a S-band, bankruptcy strong because start it when OneWeb, will bit is company. come a bankruptcy, through an out, to low about interest in of in most plan world continued the out Anders little to always of position. business It talked we companies opportunity our think

side. interest maintaining there, interest we much financially, small so, technical commitment And but a greater the from continue

Ric Prentiss

do hybrid out DISH in able well? where think so, the as about envision you how U.S. do And help you and view EchoStar you network, spectrum being and playing hybrid that's to when the

Charlie Ergen

lot because rural next backhaul. network. economical both, backhaul And a is that. Satellite that a sites, and that as Jupiter, at to EchoStar It's DISH going make more the Jupiter of today. it satellite be my build can a hasn't has to, and And you're that people out for where do obviously even stuff design might Jupiter capability places an involvement to the of in out that things been has inside we builds aren't to before. if tremendous as normally there Well, able that look part of maybe maybe example, building be the DISH wireless do advantageous, in way

are case it including companies at perhaps sense, you go obviously you there's how we make certainly go But look that affect if your can course, that separate companies, So, can at the when wireless two phone and S-band that a there a their device, to low things make And sense. that look a between frequency you the that of the very around small world, ways. from might and they play don't the satellite. is make things powered

that So for we world. working around the the potential think on things carriers Anders that are have wireless

world, architecture, lot there's Hughes wireless as well. that experts opportunities in -- becomes the of on particularly -- really dividends as O-RAN strategically XG architecture, how and DISH So will a cloud-based in pursue for the pay and EchoStar

Ric Prentiss

be at it got need far is last balance one as sheet the EchoStar me. want you a of the M&A strategy for you've in interest And Great. as what world great What to make Obviously would play here EchoStar. that would out? or kind of

Charles Ergen

Yes.

look where build there. the -- those long-term, And make increase there's out shore things that a do might that great you'd Do cash be they the companies we an lot for of Those positive anything cash can have EchoStar out for are Do on are up? particularly they synergies, -- world the that for think of flow in synergy, that already companies is doing have? flow potential business, you'd and and doing up I look they we have? broadband there shore connectivity the weaknesses in what kind can strengths the in things, with there.

of. if going been the good to continue there's short-term, just be we've sheet, customer be, on as to certainly said, are with spot of advantage in patient, we based but a And the Some take nature patient. a and the strong you base. would it's balance We'll to struggle opportunity,

Ric Prentiss

for why the sheet, And than stock been opportunities opinion, in not buybacks? balance the buybacks keep maybe because on that's the stock but clearly cash rather our of has undervalued stock a lot looking

Charles Ergen

the use look that, dividends. I means I able some for do can extent to that but that to our sense. put -- at shareholders. then stock foreseeable look but found at I hasn't grow in buybacks capital that better our for keep management that we challenging to to And buybacks, something a to to our place stock we return do that's a make come we're future, the Well, look to find We extent of perhaps conclusion capital, always we think not at a management We capital the stock, management. challenge better

we And bought I a so, think little Dave? bit. back

David Rayner

little. End of we a bought QX, back

Mike Dugan

End anything in of didn't back QX. we buy QX, but

but capital. buy a we of better authority So, of us you never, continue use it's a our But given stock, to that remains never back, hopefully I do, something to say and if has Board can that find the not, believe, million $XXX we our possibility.

Ric Prentiss

difficult on times. Great. the Appreciate being these in Stay [Indiscernible]. today well call

Operator

Analytics. line question with Chris Quilty next Quilty the of Your comes from

Chris Quilty

Thank a on you. the and operations, you've been follow-up you first you've on across But when international Latin company's growing I just you've then and get back India. of internal little the America, to look got that to bit want over investment. got M&A in portfolio question focusing

You've opportunity. got a LEO

your given makes that there You've area you on growth or path? got to traditional a maybe of where an the sense with and find perhaps most business out it struggling as you've stands the do bolt-on the to something in those to one got GEO. capital Is step that competitors any faster out additive a and that's hand fact your

Mike Dugan

addressed Who's to? that question

Chris Quilty

Charles, sorry. I'm To

Mike Dugan

I'm sorry.

Chris Quilty

what Anders say know I Pradman say. I will will and what know

Charlie Ergen

don't one if out. any that there's thing I Yes. stands know

something that's is think to it's satellite, the where satellite be doesn't somewhere have I there's something been ideal connectivity but connectivity the broadband the business. where business, situation in that synergy, of

investment generate can cash flow term, in that something to even long get if And the there. it needs

So it's time. interesting

you hope rewarded. hours, in hands, for I now eight have to four years. days, patience holding been home eight and I hours. but hasn't sitting for patience, win It three, But you pretty you Poker two be my go last will it think big And, I remember our last from the hold the winner. game a Poker

well. business not going people's changed while, would some business to patient. are certainly the pandemic be has think lessons things to business be a I plans term, but of long those control, apply You things while. certainly to changed industries as for just people's are, and are a beyond And had some And for

see we And day. these at things if every us, and would so make look it we'll for sense

Chris Quilty

specific follow-up, And just throw a a example. maybe out and I'll

a But market, is connectivity turns industry, badly, you the guys as I happening that but taken right people in-flight the the of approach right have Obviously are With to industry a that sort as the a you which that out. market? you'd pretty be was to it approach stake fortunately hurt going chain market maybe something believe at it look arms-merchant growth in assets take now. more a going fulsome aviation there's an that most in think things the that is available, market? what's believe And of supply is in on

Charlie Ergen

long-term this rather certainly well them. does Hughes team people are. or is We've his approach Pradman think positioned partner been, need our business, technology and a are and than our chosen to and compete it's Well, companies capacity and I The EchoStar so there. has who to with with

And companies. try a has to do think most internationally, if alone to strong asset. we've we'll to to that's partners rather think and we've what partner so And to where a we've us, when, somebody long done a partner, And we with to than with I internationally part, done we look, we or same I extent and partner to that thick for they've would that needs have partnered with us, that compete, through the partner connectivity everybody. of lot help, everybody we've And companies loyalty with to we're, those in but those an willing the as we've because rule partner is, companies, and than the companies not variety rather been where somebody the rather relationships thin, there exists, of thing we about as help with in-flight those space, asset relationships with they they're then for as companies, where we a them duplicate general rather, feel that are would good to it chosen to us. been strong go with continue to just have as willing

the business that's I that with think we people us. want on continue extent So would to to to generally do that continue a path

Chris Quilty

has Understand. grower if you and demand consumer broadband I at have the Hughes. And The business XX built question acquired Charlie. steady years, final been for pace last new the great, And actual which yet continuously lagged over satellites for look has in the the back guys market.

at which it happened this market, a a Viasat about look still is both see and to would better replace you when it that's or at with step do with satellites? time performance X happens design you Hughes you in those a I talked Viasat and When of Viasat, GEOs, fact. the up think that see for perhaps is to step make time sense LEO? a kind on has improved And already path back what pace

Charlie Ergen

Well, good it's a question.

the things. couple duplicate. a we've have United One that to infrastructure and the we get built knew DISH we So, is, capacity both we I'd didn't to one States, of to and we exactly totally States because of our DIRECTV things in United has needed rural say the that customers in where had

to So now of already because chosen partner the for America American people South partnered international some is government we've of in There's the it's kind there side always, Africa. facilities always, animal. is with and regulation. in had Brazil an us. we've a degree, on North market in market unique with that's to different We a kind Internationally, Yahsat

on and hole We alone. gung market. on pretty international the that internationally. necessary complexities we're But operating want do go don't environment So the to regulatory we the of

as to strong find commit partners we're local there. invest willing as those, want So that, money are who to we people willing we to certainly

that will On because actually and I how prudent are do will starting MEOs also but the which terrestrial. with we side, we've in compete there GEOs, be future technologies that been technologies it LEOs, satellite are three that two to, are, think

GEO away think Those extent to economical will will a then there's changer. the to working on don't XG of people the of opportunity build change the you we be LEOs take DISH lot exist -- terrestrial advantages and array you based phased we've GEO. awful antennas, can MEOs phased that's and array the a extent on that things and certainly on one on we the And side game marketplace we'll think of antenna, the the take so, some that architecture, a And the of get side, And from there's perspective. them. complexity a away learned satellites lot an yet, that of but it of low-cost in opportunity on

been know we prudent know in our we it. we've what meet basically We that demand North usage So about We We're that full America. that satellite capacity demand next-generation know is, we're basically full. today.

So around capacity. the there's well. the rest GEO other we think we addition in think desperately that don't But States that need world. opportunities include in of we GEO the there's as to United And opportunities

a a I take industry, there's the look, a have different the in good direction. the have in on moving we advantage it of starts a extent So, and picture, industry satellite that to balance shift strong we as a handle as paradigm to big sheet think anybody that

Chris Quilty

sooner the responses and sometime for Thank the to than stranger. be Great. don't a next... you Hope see

Charlie Ergen

I be sorry around me have invited promise to pandemic, do I'll due felt they once for and year. so I the to me. don't anything a

Operator

from Your with of next Giles question comes Jefferies. Thorne line the

Giles Thorne

plan the on be be interested I'd My my of you. work question. first Pradman's comments business new will? and OneWeb. previous why back on the the topic That hear plan business question And would didn't first Thank to was

Pradman Kaul

Yes.

as earlier -- today, said is think won't really mobility mentioned, where the the -- markets I in a big my the market and enterprise think government phased elements it market the of into of not focus one comments. And markets, come unlike is the cost in those exist common of do and as you plan that that need the the is the array markets a consumer I antenna, I business are consumer factor, for those really market Charlie new antenna doesn't but play. to the

hurting different are So And antenna no bankruptcy, is stuff by the element types is the company old obviously sheet. timing there, a investment people. the balance and longer wasn't I the out bringing think major think, of probably you're it's two because the of I where partners much in your stronger last totally them

which And obviously largest what, major got You've partner. balance over Bharti world, government, million size got wireless has infinite has, in of service Kingdom the other as one the XXX United sheet. the you've Bharti, obviously then subscribers. the providers

So of applications, they're other of terms in and in strength cellular Africa. very they'll and and bring India big Africa also to a lot backhaul OneWeb in rural

complement our venture. joint they'll YahClick So

So obviously over $XX -- think, network. and raised, their also so I far they for have billion wireless

So know They're successful. they raise to very how money.

So government, between UK previous the their a -- leg plan. in have did big them and they the than current on think they in plan I

Giles Thorne

that. not new remember So long hard just a If two picking enterprise mobility up we're I to want on I one government happened correctly, phenomenon. time and say, That's consumer XX pivoted to pretty from That's ago. a maybe months, ago. years

makes a you bit I a give comment. So, the comment Could maybe is sense. bit us mean, on what color antenna the the more more really that around side doing? suppose understand I don't I antenna just

Pradman Kaul

plan on not don't and had on the Right. consumer there. the the business they a current business antenna but they The market market, that the was The because don't have cost point and is focus have emphasis plan, the in significant previous previously, much antenna. consumer technology

that So the development didn't the their was was two to of shareholders second fund obviously the act. funding That and comment all element continue is, business the to -- what And plan. ability the about.

Giles Thorne

comes mind and is specific Understood. going think development, that antenna of thing sort first And mean, to stable side then, I just back. if I sticking about panel with Okay. going antenna. the the more

you're me, just the color can are your So, you than because us on confident? antenna seeing into side give you've certainly because what got visibility better you

Pradman Kaul

companies of trying to. to we XX that probably develop phased antenna the to at five need cost maybe Well, energy they're and on spending lot points that time a array are a

cost Now, array The antenna maybe phased go each maximum. aeronautical markets The market $XXX $XXX, of consumer points. a want obviously different $XXX,XXX. antennas these has two would market for

is you at an some as is not the possible markets, on the markets market. the go it enterprise to and cost the mobility government when antenna the pressure markets the So as in having of strong consumer and lowest

get question if probably there's build points figured to the technology those the you for look I array the and both technology today, we other maritime to phased low for at nobody $X,XXX enterprise think But no markets markets. need range. So, is we the has it the out aeronautical down the for and low the in But that the markets, there price end, can at antenna how for $XXX.

economics a the years a market. that taken think So, from for right having up away position markets. probably have the we'll few consumer I now we are in those It's of

Charlie Ergen

segment And this OneWeb. the has know in just testing add been we are of we things One the Yes. And that Charlie. things we ground work. do lot is technical of current satellites while know couple a to still obviously mean, the that heavily planned, plan technology the things, system have up. involved of there's two I'll I terms can in that works. original is, on

from came bankruptcy several orders, out Iridium it's but a given they obviously will well-managed, it thing bit value the a sheet, government's of billions and it Second of like, Defense, of involvement not is, potentially, saying balance revenue. that's little It but out bankruptcy supports where comes I out million, comes of UK as as it orders had and out $XX lot a you be It's also company. now. it actually of with of and dramatic a I'm the believe as they, expect this, they would with bit potentially bankruptcy, little that Department dollars strong a and came like very, and

priority a the exist that needed megahertz OneWeb of of remains opportunities of in hump. use And in needs ITU the high over of to to gigs having the thing frequency for OneWeb, just those So, or be, just second the get thousands is frequency.

which from to so already point continue just today, enough they positioned a line, funded have satellite. well can launch a as for they're of to a So word, be and building has, of view launch of satellites, a company do as they that position, from regulatory it's the a and they'll more contracts, well as lack regulatory matter is, first long better in

a right way right with Still to long of partners for potential lot the go, structure a them they're there's forward. moving OneWeb. with but So, in positive the

Operator

Citi. line the Rollins from comes question of Michael next Your with

Michael Rollins

Thanks Hi. questions. could. taking Two, for I if the

you us some mobile the of how And as as evaluates IoT, step with? sizing company, to spectrum operating wireless EchoStar, it holding, more push to is you're exist S-band that controls a a the more purposes a an you first, that EchoStar you likely model or that for don't create taking share investments the back, value it revenue business given these as satellite a from partners or can really likely XG, trying holdings other lot strategy market, monetization that of So is with then it think can through for example, and Or today. alternative about just addressable those finding applications service? spectrum, for for services

could you share that great. framework would and maybe that using be if So some that, Thanks. numbers with us the for you're

Mike Dugan

you do want one? Anders, to that take

Anders Johnson

on our getting now, efforts so early crystallize our launched, Well overlay the are rights. on existing I which LEO the focused days. GEO satellites side, our initial it's mean, rights, as to right S-band certainly

a in comments, hand, that I essence, anchor once of don't customers in. us the mentioned we development makes discussions potential we the meaningful that rights to which in S-band monetizing already spectrum plan once partners the sense have parties. in business we're non-geostationary a with of or to third intend my be customers service, see I So, in as invest number would, in just

a opportunity us areas of use unconventional that. terrestrially same the I we some developing then have of to in of co-licensing the MSS extent the spectrum ways. don't already second the pursue own think we development opportunity very I where we in then see wave And the

Operator

the Cowen. Kyle with from line comes question Davis of next Your

Kyle Davis

in about trends questions the two business. the residential have I

guys which driven could back the have revenue held increase, like faster it in is, of wondering was may ended? assumptions that? was, growth your me if wondering one the headwind much in that could expect the some And And Connected pledge churn if I first residential revenue second quantify I the the of you but in an make acceleration ARPU talk the So, than FX was what you around your suggests about as you sort me America to question QX to quarter? what does residential the we how then, And subscribers, quarter. the has issue to Keep for have look grew

Mike Dugan

certainly, over There's finish no in grew up growth start, from in significant question, little then QX. QX ARPU America bit. a X% Pradman I'll the North and that was, was can It of XXXX.

side in the what as The So part Most we data the those capacity that had, exceeded on they business. and the are are significant. caps, $XX up, said, utilization additional really South was those that's of decline of year-over-year the buying a FX ARPU certainly an customers drove at And part. that's in headwinds that of of indication, upgrading revenue result the consumer in as million least as plans, impacts. America higher

of say the Pradman tens is, I'll on going thousands, of going subs he its forward. what and we're what terms in pledge, to and disclosing the it safe to of that the to it hold number back address number let thinks In happens is

Pradman Kaul

Yes.

I that think end June. reasonably a We've And were we've to subscribers them bucket. that the started converted regular big this customers pledge we percentage and period found dues. the has converted ended of in paying as of the they of the

as subscribers now, -- pointed out or clearly something think -- were we the bucket were this that we I that churned pledge Q the the counted in having out. in So

been paying in any them months churn But numbers in stage. what I the And done, to caused our forward. in normal this of this But that converting significantly. all all, being we that mode see case, go should couple So agreement be a it's recovered last higher that the signed our to slightly we're next at the as by think in harming than has numbers and government now we as seen pledge not had in we quarters. few we with customers,

Kyle Davis

Got was you in orders lot it. Or that being persists QX? stay-at-home persistent of back than think more something is would it under And into a is guess to that that? Or on, is strength you of half year? the particular the you've people that ARPU do it's commented guys that something it --

David Rayner

was question in that sorry, what? to I'm relation

Kyle Davis

North ARPU America The you in that on, commented David? boost

David Rayner

Yes.

working going still still returning from there's that have to from home, I see schools. continues. classrooms are versus think if to If people we're whether home to

usage a the our their on a will customers around unknowns forward. in COVID-XX be and be I specifically, of go what patterns, impact more terms lot more we will of think that societal and individuals the and impact as

happen to really what So, is to going tough forward. forecast it's in usage going the exactly

et And returning on returning so we've to more school, got to work, cetera. clarity

Operator

from Raymond have with Prentiss Ric You question James. follow-up a

Ric Prentiss

for again to more at Charlie. year, a figure don't throw we Charlie Since Thanks. get another couple

Charles Ergen

Come on the DISH call tomorrow.

Ric Prentiss

is, run? more and Exactly. the the on of You do X And swaps short-term. were, X. of can broadband? mentioned the envisioned to the think consumer you DISH, easy what over on is that at question DISH What fiber, right. between think and the you competitive any dynamics, pay and speaking Jupiter return about one Jupiter earn were long you the and in you you quick how trends But EchoStar think for see were early LEOs the ability curve the in demand are that But and a as blunt complicated TV you demand other look asset you the in trends do

Charlie Ergen

just lot of of because our customers we I cost because is more capacity, already to a I North customers what in broadband than we've mean, churn control probably acquisition previous our better it's America, over subscriber lot satellite. and a asking math can, are is but and to the place Well, for answers have Jupiter the Pradman for X on been on good. able comparable And

a that's that's We to The rate things the development internal you of happening five to confident say, only us. is the and go, we're that churn The if regardless two rural next continue will, look the is funds, to as years Satellite with United as the GEOs, and down who of to of play a for would States. became LEOs the we connectivity, there. so probably, will happen of But are of grow United was where road So ubiquitous to biggest be so MEOs like might government, thing good broadband. turn thing, going States going President role subsidizing obviously, and we think there'll is. that rural where and electricity electricity the and think terrestrial. subsidization had at people Same century broadband be will across it's going ultimately well the

do and right in of capital can come that second, cost think broadband in antenna I with obviously, play place the low that is have they a And of the connectivity, take to GEOs do on to that and subsidization. consumers? is that forefront an of continue can what what be So go if spot. do and well that's EchoStar what the enough down they the And terms we'll, you've government a LEO to, the got MEO, get or to two things, for going to

And well do other and just certainly then not than, maritime going positioned satellite So any commercial. just do aeronautical better but you're not go and we're there, way there's to like things. things you're also going do to that

investment we about feel do it. I then when mean, expect that's can money, I like at we doubt, feel vertical good do do, don't we it and And So going and to we we go we like a we something, return. when always every and math, we're the in to where make there's into look think get And a go. that

Ric Prentiss

a Great. Thanks, Charlie. That helps lot.

Charlie Ergen

the EchoStar, get anybody world of to knowledge seeing XG there add are very their, to the I'd a DISH it, they isn't in getting side, Probably, the isn't at levels. talking to, they wireless to architecture, so new from DISH access how everything, network generation, on that high in because build DISH side is

I some we in seeing see so it. share information privy going helps can knowing the the to long lab and things And was is to is it and of DISH the that, before technology consumer So are where EchoStar, extent them going. to in

terrestrial advantage EchoStar knowing be and is a think world products given both an away of satellites. lead And process might the in cycles go will building of staying has help that that to world in so, from terrestrial going the the long not decision-making at the products competitive developing about where lot I terms

sense, so I think more positioned other companies. So they're uniquely and that than perhaps in

Ric Prentiss

the transfers in short-term? asset other planned no And

Charlie Ergen

here assets the transferred. be have assets might all but the there some I been there, assets, or think material material think I

Operator

Your next question Hathaway of line comes from with View. Far Brad the

Brad Hathaway

guys. Hi,

thanks for about the Sorry a taking and ago, minute question.

potential larger So, kind do about I you a your When M&A you and you capital, question about think bigger how equity of think the kind just of to of ask cost about wanted picture. price mean, share Charlie, I of kind perception your of kind then a your, think changing about you lot a Does to as that as that how of going peers? valuation And do it frustrate attract same kind seem your doesn't forward? asset? of maybe the that EchoStar you

Charlie Ergen

Well, multiple strong is mean, see some at materially EchoStar. than analyst lower a a record financial performance takes EchoStar I that great I think companies. track Yes, our, been there's other EBITDA it at to of the think, don't I

convince but the and it. they're challenged long-term those that little growth market it have clearly, markets though So seems management they even challenge sure that would are actually even be capital to growth disappointing, to high to future, got the that in be convince make to enough and plot go long that accelerate to but level, plot-ed opposed growth sustaining for multiple and do our a that can the me, if they they've just at it, justify have it's it's to show up it's multiple. to you to low, a at out need do there they market, to things the management look so and as But long, they've that to higher got today, be

talk get to you shape why saying same them of so to Anders, So call, That's should the on this little management. up into the we thing if to to be and want whip Pradman and get a we and Mike all bit. I be our guys call, we'll

Brad Hathaway

I one of you concerns appreciate kind overhangs been long-term capital the because on the historically think allocation. Greatly over of being call

to strategy going discussions forward forward. your some Thanks of quarter long-term thoughts. the so appreciated really on the your about congrats some and kind again, looking seeing of of And and operational

Terry Brown

more think we've time I Operator, for got one call.

Operator

Okay.

Your of the final from with Rollins Michael Citi. question comes line

Michael Rollins

just I had that second Charlie. Thanks. for the on question wanted to follow-up I

today? a for IoT of talk in you're don't given opportunity, in looking services that a you're that how and sizing the way satellites, bit as this and with that exist could form market you invest revenue lot that to XG If and or applications

Charlie Ergen

an think potentially don't exact size and is large. the have we market I very

So, in be things you fiber. of that certainly billions that access have a terrestrial connected, or aren't to need of network

how you think So about can and you things to can and might maritime think want geography those connect. about certainly

and You that of some doing some Inmarsat doing can see of today, Iridium today. Orcom that

market. could units, of it's that, a start going get to got that think huge with phone things billions as -- you the the picture the handheld, inning And a you first into a making whether about of you could of to those the that's connect, see but can it anything is you devices and that -- you something big be you connect. kind already imagine of And it's the month in or you else go. beginnings if of So where that's billions it's connectivities, you to dollar even were

right planet develop devices, doing do anything technology And the with an could is fixed enough so, all an that. large you that have you -- low satellites you that's and omnidirectional need that incredibly from that prevent and we power low lot for S-band to that the that antenna, frequency see you be. have business, might what that. assuming you don't to And from frequency physics an cover that's imagine fleet a it a of don't battery of need can a

with chip lot might be be could of simple as world a antenna, you regulatory, device. from but nothing a which an those connected the would have you issues, country, -- might prevent omnidirectional have physics as have from of in around kinds which might a there's You people each to

have it frequencies. array problems antennas So the with of phased same kind with the KU-band we doesn't that had

with different people. on, and spending what of a So is different time Anders that's market, is application, but working lot Anders that on

in what business up, first have but we is hopefully, next big -- we for We the people get our we're own quarter have satellites up. satellites first two ideas, two other and there's us, the still we'll could our which call think a -- have that's ideas, potential

Terry Brown

Okay. the Guys, we're out of time here, so meeting. we're ready to conclude

everybody to like I'd calling thank in. So for

Operator

for you this gentlemen, call. and thank your concludes today's Ladies And conference participation.

You may now disconnect.

EchoStar (SATS) 8 Aug 202020 Q2 Earnings call transcript