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In 2008, US satellite company EchoStar became a spin-off of DISH Network to concentrate on data services, while its erstwhile parent focused on media and entertainment – and in the latest of a number of clear demonstrations of where the satellite industry in general is headed, the two companies are now to recombine, merging DISH Network’s satellite technology, streaming services and nationwide 5G network with EchoStar’s premier satellite communications offerings.
The combined company will be headquartered in Englewood, Colorado, going to market worldwide under a suite of consumer and business brands, including DISH Wireless, Boost Wireless, Sling TV and DISH TV, as well as EchoStar, Hughes and Jupiter 3 satellite services, HughesON managed services, and HughesNet satellite internet.
The combined service bundle is designed to not only provide the DISH corporation with premier wireless, satellite and video distribution capabilities, but also a pathway to take better advantage of the burgeoning 5G communications sector in the US, mirroring the actions of rivals such as SES.
At present, DISH’s 5G wireless network covers more than 70% of the US, with full commercialisation said to be underway and the launch of EchoStar’s Jupiter 3 satellite providing available capacity for converged terrestrial and non-terrestrial services.
The combined service company said it will be well-positioned to deliver a broad set of communication and content distribution capabilities, accelerating the delivery of satellite and wireless connectivity services desired by customers.
The transaction was negotiated and recommended by special committees of independent directors of both companies, and unanimously approved by the boards of directors of both companies.
Hamid Akhavan will serve as president and chief executive officer of the combined company upon closing of the transaction, and Charles Ergen will serve as executive chairman of the combined entity. John Swieringa, president and chief operating officer of DISH Wireless, will be president, technology and chief operating officer of the combined company.
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Erik Carlson will continue to serve as president and chief executive officer of DISH Network until the closing of the transaction, at which time he will depart the business. The board of directors will consist of 11 members: seven DISH directors, three EchoStar independent directors and Hamid Akhavan.
Akhavan said: “From unconnected individuals in the most rural and remote regions of the world to the constantly evolving networks of private enterprises and government institutions, the connectivity landscape is rapidly changing. As a combined company, we will offer a broad suite of robust connectivity services, using a superior portfolio of technology, spectrum, engineering, manufacturing and network management expertise. DISH shares our customer-first culture, and together we will be well positioned to further scale and accelerate our strategy.”
Ergen added: “This is a strategically and financially compelling combination that is all about growth and building a long-term sustainable business. DISH’s substantial past investments in spectrum and its wireless buildout, combined with EchoStar’s recent launch of Jupiter 3, are expected to significantly reduce near-term Capex requirements.
“The transaction is expected to generate significant cost and revenue synergies, and the strong asset portfolio of the combined company, paired with its enhanced free cash flow generation capability and strengthened capital structure, are expected to drive long-term value creation for our shareholders and other stakeholders,” he said.