TAMPA, Fla. — EchoStar has placed a $1.3 billion order with MDA Space for the first 100 satellites of a $5 billion direct-to-device (D2D) connectivity constellation, even as regulatory scrutiny of the company’s spectrum licenses threatens to push it into bankruptcy.
Canada-based MDA aims to deliver the satellites by 2028, with services expected to begin the following year. The contract includes options for at least another 100 low Earth orbit (LEO) satellites for an additional $1.2 billion.
EchoStar CEO Hamid Akhavan said Aug. 1 that the U.S. geostationary operator estimates “peak funding” for the constellation will total $5 billion, when launch and other costs are included, all of which it plans to self-fund.
“[At] this point we believe we have everything in-house to make this happen,” Akhavan said during the company’s earnings call with analysts, while noting EchoStar remains open to partnerships.
He said more details will be revealed in September during NovaSpace’s World Satellite Business Week conference in Paris.
Funding questions
EchoStar reported around $4.5 billion in cash reserves and marketable securities.
However, while revenue is rising from its Boost Mobile wireless services in the United States, those gains are being offset by continued satellite TV losses at Dish Network and broadband declines at Hughes.
EchoStar has also paused efforts to expand its 5G network, while the FCC reviews whether it has met terrestrial buildout requirements and is making proper use of the S-band spectrum it plans to use for its D2D constellation.
The FCC review follows claims by SpaceX that EchoStar is warehousing valuable spectrum, which the company denies.
In a regulatory filing Aug. 1, EchoStar warned it may seek relief under Chapter 11 bankruptcy protection to safeguard its spectrum licenses.
“Such a decision could be driven by a range of strategic considerations, including, but not limited to, the uncertainty created by the FCC inquiries and effective deployment of capital,” the company said.
Analysts such as Adam Rhodes of Octus interpret this as a tactic to gain negotiating leverage.
“In other words, it would be a strategic filing intended to bring the spectrum disputes to a venue friendlier than the current FCC,” he said.
If the FCC process is resolved in EchoStar’s favor, Rhodes said the company would have several options to meet its financing obligations.
“With the D2D space quickly developing and more optimal 3GPP [wireless industry] standards coming to fruition, it makes sense for the company to get started now, Rhodes added, “especially as its European S-band rights are scheduled to expire in 2027.”
Entering the fray
Like other D2D hopefuls, Akhavan said EchoStar’s service would complement terrestrial mobile networks by reaching users beyond the reach of cell towers, though the company may also target consumers directly in areas without a carrier presence.
EchoStar’s “wideband” D2D service was characterized as sitting somewhere between the basic narrowband SOS messaging Apple offers over Globalstar satellites and the high-speed broadband delivered from space to dishes on the ground.
No one offers a wideband D2D service today or is even planning one, Akhavan argued.
But Philip Burnett, an analyst at New Street Research, pushed back on this claim.
While today’s services are rudimentary, Burnett said wideband connectivity has long been the goal of every D2D operator.
“It is certainly on the roadmap for [SpaceX’s] Starlink, AST SpaceMobile, Lynk, Omnispace” and others, he said, although EchoStar has “the best spectrum assets for a global wideband D2D service, and so they may have a head start.”
While analysts remain optimistic about the D2D market’s potential, questions also persist over how large the market could grow and whether it can sustain multiple players.
MDA constellation growth
The EchoStar deal is the fourth constellation prime contract MDA has secured in just over three years, as the Canadian firm pivots from a subcontractor role to full system integrator in the LEO market.
EchoStar’s satellites would be based on MDA’s reprogrammable Aurora platform, which is being used for Globalstar’s planned Apple-backed upgrades and Telesat’s upcoming Lightspeed broadband constellation.
MDA is also prime for a separate contract to replenish Globalstar’s legacy network, using satellite buses from Rocket Lab.
EchoStar envisions scaling the D2D constellation to thousands of satellites over time, depending on demand, to enable global talk, text and broadband service directly to standard 5G smartphones.
Financial Snapshot
EchoStar reported a 4.7% year-over-year revenue decline to $7.6 billion for the six months ending June 30.
A 7.4% drop in pay-TV sales offset growth in wireless services. Broadband and satellite services revenue totaled $710 million, down from $777 million during the same period in 2024.