EchoStar Corporation has successfully acquired Dish Network, finalizing their merger on the last day of December. This acquisition marks Dish Network as a wholly-owned subsidiary of EchoStar, a move primarily driven by the pursuit of advancing 5G technology.
Previously known as EchoStar until 2008, Dish Network rebranded itself and separated its satellite internet business under the EchoStar name. In recent years, Dish has shifted its focus towards 5G technology, acquiring Boost Mobile and initiating Project Genesis, aimed at establishing a fourth major network in the US alongside AT&T, Verizon, and T-Mobile. However, as of late 2022, their progress in this regard was not considered significantly impressive.
John Swieringa, EchoStar’s COO, highlighted the merger's potential in combining technological, operational, and engineering resources. This union aims to position EchoStar uniquely, providing comprehensive global offerings connecting consumers to internet services, wireless phone connectivity, streaming, and extending to enterprise and government services. EchoStar's board chair, Charlie Ergen, expressed that the merged entities intend to offer an enhanced consumer connectivity business, leveraging their joint strengths.
The FCC approved this merger on December 6th, considering it an "unusual" deal due to Ergen's significant stake in both companies—holding over 90 percent of the voting stock and more than 50 percent of the equity in each. However, the FCC viewed this merger more as Ergen combining bank accounts rather than a conventional merger. According to the FCC, allowing this merger to proceed would align with the public interest, convenience, and necessity as per the Communications Act of 1934.
Earlier in June 2023, Dish Network announced its compliance with an FCC deadline by covering 70 percent of the US population. The company has a subsequent regulatory obligation to attain 75 percent coverage by June 2025. Given Dish Network's prior financial struggles, this merger offers access to EchoStar's financial resources, providing a better opportunity for Dish Network to meet the upcoming coverage deadline.
In essence, the finalized merger between EchoStar Corporation and Dish Network primarily aims to bolster the latter's 5G pursuits, combining their strengths in technology, operations, and engineering to provide comprehensive connectivity services to consumers, enterprises, and government entities. The FCC's approval, despite the unconventional nature of Ergen's stake in both companies, is seen as a step forward in advancing the telecommunications landscape within the US.
Source: Hughes
