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EchoStar stock falls amid FCC review and missed payment

AuthorLouis Juricic
Published 30/05/2025, 13:52
© Reuters.
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SATS
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Investing.com -- EchoStar Corp . (NASDAQ: NASDAQ:SATS) shares tumbled 21% following the company’s decision to forgo a significant interest payment due on May 30, amid regulatory uncertainties. The satellite services provider is currently under review by the Federal Communications Commission ( FCC (BME:FCC)) regarding its compliance with federal obligations to provide 5G service in the United States.

The FCC sent a letter to EchoStar on May 9, 2025, initiating a review of the company’s adherence to its federal commitments, particularly focusing on its buildout extension from September 2024 and mobile-satellite service utilization in the 2GHz band. EchoStar responded to the FCC’s letter and public notices on May 27, which is publicly available on the FCC’s website.

Due to the ongoing review, EchoStar faces possible reversals of previous FCC authorizations, creating significant uncertainty over its spectrum rights. This situation has hindered the company’s decision-making capabilities for its Boost business, impacting network buildout and necessitating a reassessment of its business plan and resource deployment. Consequently, EchoStar chose not to make the approximately $326 million cash interest payment on its 10.75% senior spectrum secured notes due in 2029.

EchoStar has entered a default under the terms of the indenture for the 2029 Spectrum Notes, with a 30-day grace period to fulfill the interest payment before it escalates to an Event of Default. The company has refrained from making the interest payment to allow the FCC time to respond to its request for relief before the grace period ends. EchoStar aims to continue its network buildout and expand its Boost business and MSS service with confidence, pending the FCC’s decision.

EchoStar has affirmed in its SEC and FCC filings that it has met all necessary 5G buildout milestones. However, the current situation with the FCC has cast doubt on the company’s future operations, leading to the sharp decline in its stock price. 

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