BusinessResearch

Tracking EchoStar’s Subscriber Declines: Payload Research 

(Editor’s note: This is Payload Research analysis. You can sign up for our Research newsletter here.)

EchoStar reported another quarter of declining revenue last week as its Hughes Network satellite broadband, TV (Dish + Sling), and retail wireless (Boost Mobile) subscriber base continues to shrink. 

Declining TV subs are driven by the advancing streaming and cord-cutting landscape while Hughes Network’s internet subs face strong competitive pressure from SpaceX’s Starlink network. 

+ Billions to pay back: The company also faces a $2B debt maturity payment that is coming due in less than six months, which has prompted the company to warn that “substantial doubt exists about our ability to continue as a going concern.”  However, the company said it was actively discussing raising capital with investors. 

HughesNet is EchoStar’s satellite internet service, which is provided via its school-bus-sized GEO birds. The subscriber base had been experiencing strong growth—peaking at 1.6M subs in 2020—before a sudden halt and sharp decline.

  • What happened during the 2020-2021 timeframe? SpaceX began ramping up Starlink constellation deployment and opened its subscription pre-orders to the public.
  • Since SpaceX launched the Starlink internet service, its customer base has surged—while the HughesNet subscriber base has declined.

The rapid HughesNet subs decline is particularly notable given that customers are typically locked into 24-month contracts, which should blunt dramatic downswings. 

(Note: SpaceX provides Starlink ‘customer’ numbers, which are not the same as subscribers—so the following two charts are not entirely apples to apples.)

Cue correlation/causation caveats. While we can not solely attribute HughesNet’s decline to Starlink, it is the largest driver here. 

“We are obviously losing some subscribers to other technologies and other LEO networks”, said HughesNet’s former CEO, Pradman Kaul, on the company’s Q2 2022 earnings call. “The biggest threat right now really is Starlink because they are—they can address the latency issue that the GEO sat has done. So we’re losing some subs clearly to Starlink.” 

Mix shift for the win: On a positive note, HughesNet suffered a net subscriber loss of just 26,000 in Q1, the lowest decline in 10 quarters. The mini-stabilization can be attributed to a higher proportion of enterprise customers, which tend to be stickier. 

Dish + Sling TV Duel Streaming

Subscriber demand trends for the company’s TV segment are not much better than for satellite internet. 

At the end of last year, EchoStar completed its acquisition of Dish, which included Dish TV, Sling TV, and Boost Mobile products. Dish and Sling have seen a steady decline in users due to rapidly advancing streaming adoption and changing TV consumption dynamics. YouTube TV’s streaming service recently hit 8M subscribers, making it the fourth largest TV provider, overtaking EchoStar’s Dish TV for the spot. 

“We continue to experience competitive pressure from programmers who ship content from traditional pay TV to their own direct-to-consumer services,” said Dish EVP Gary Schanman on last week’s earnings call. 

While the subscriber base is diminishing, the service still generates substantial revenue, with Pay TV accounting for $11.6B in sales for 2023.

Retail Wireless Division

EchoStar’s retail wireless division primarily consists of Boost Mobile, which the company acquired in the Dish Network acquisition earlier this year. The company reported net positive Boost Mobile subscriber growth in March.

Path Forward

The company reported $766M of cash/marketable securities on hand at the end of Q1—after paying down $1B of debt on March 15. With limited cash and forecasted negative cash flow, there is concern over whether the company can find the capital to repay the loan. The predicament prompted equity analyst Craig Moffett to forecast that bankruptcy was the most likely outcome in four to six months. 

Related Stories
Business

Lockheed, Northrop, and Iridium Q3 Earnings Roundup

It’s earnings season for Q3. This week, a pair of primes—Lockheed Martin ($LMT) and Northrop Grumman ($NOC)—and satcom operator Iridium ($IRDM) reported their revenues for the third quarter. We’ve got the roundup of all the space-related tidbits inside. Lockheed Martin: Lockheed’s overall earnings are up and beating projections for the year, and its space business […]

BusinessSatcom

Lynk and Omnispace Plan to Merge

There’s a new combo forming in the direct-to-device sector—and it’ll have key access to a high-priority band of spectrum to help it compete in the growing field. Lynk Global, a satellite operator with a constellation of D2D and IoT-enabled satellites, plans to merge with telecom firm Omnispace to expand their business across both commercial and […]

BusinessMilitary

Vantor Wins New Space Force Contract for In-Space Monitoring

Vantor—the artist formerly known as Maxar Intelligence—is expanding its relationship with the DoD through another in-space awareness contract. The company will work with Space Force’s Joint Commercial Operations program to provide in-space imagery and analysis on high-interest objects in space, particularly those objects located in blind spots that can’t be seen by ground-based sensors. “Often, […]

BusinessMilitary

Apex Set to Launch Commercial Interceptor Demo Next Year

“We’re doing this on our own dime,” he said. “We are just trying to do our part, and then if we do a good job here, we hope that great folks who make interceptors will want to work with us and partner with us—and we can help supply their constellations.