- EchoStar’s Boost brand added 150K mobile customers in Q1, putting it in a better situation than a year ago
- It’s still not out of the woods as investment analysts continue to speculate about when the company will call it quits
- CEO Hamid Akhavan talked up EchoStar’s unique position in the D2D space
EchoStar’s wireless business is improving, with 150,000 net additions in Q1 2025 – a far better outcome than many observers thought possible a year ago when it wasn’t clear it would even make it through 2024 as a “going concern.”
Thanks to some fancy financing last fall, it survived and while it’s not exactly thriving – some investment analysts believe it’s just a matter of time before the company files for bankruptcy and sells its spectrum assets – it’s off to a better start than years past. And CEO Hamid Akhavan clearly has his sights set on the direct-to-device (D2D) space.
Boost's Q1 progress
The first quarter historically is a good one for Boost’s prepaid business because a lot of customers use tax rebates to upgrade handsets, Akhavan acknowledged during the company’s earnings call on Friday.
About one-third of Boost’s net additions in Q1 were postpaid, but Akhavan stressed that Boost is trying to blend postpaid with prepaid and eliminate the concept entirely that these are two distinct segments.
“I think the concept of post versus prepaid is a 50-year-old concept that no longer has significant value when you're talking about how much people pay up front” versus how much they pay after receiving a month of service, he said. “That whole gray scale of payment and credit ratings is something that we are focused on and we will eliminate. We are well down the path of doing that.”
The prepaid vs. postpaid model is something EchoStar Chairman Charlie Ergen opined about back when he first acquired Boost Mobile, historically a prepaid company. When Ergen took it over in 2020 as part of the T-Mobile/Sprint divestiture, he noted the prepaid business is kind of “backwards” and talked about the need to switch it up.
EchoStar’s unique D2D position
Another area where EchoStar promises to switch things up is in the D2D space, which is getting a lot of attention. While stressing EchoStar’s unique position, Akhavan didn’t announce any new, concrete move here.
He said the company believes it checks every box for what’s required to execute a D2D service, most importantly when it comes to spectrum, both terrestrially and in space. Its S-band spectrum is such that it doesn’t need to go through lengthy international regulatory processes to get it cleared for this type of service.
"I think that [D2D] highway is paved and ready for us,” he said, noting that EchoStar also owns satellite technology provider Hughes. “Marrying all of this together for us is just the most natural thing because we have it all in house. We are the only company that can do it all in house.”
He’s previously talked about pursuing the D2D market and pointed out that EchoStar has experience offering messaging via satellite in other countries.
“We certainly intend to be in the market as the leading provider of global direct to device connectivity using our S band rights internationally and AWS-4 for domestically,” he said. “We are very much focused on it. It is a priority for us as one of the most important strategic priorities in terms of business development.”
But he wouldn’t launch a low Earth orbit (LEO) satellite constellation today because the device ecosystem isn’t yet available for the kind of service he wants to offer. “If the satellite goes up there but there are no devices to talk to, what is the point? What is the point of depreciating a very expensive asset up in the sky without being able to get revenue from it?,” he said.
The timing decision is very important and work is underway, but they’re not ready to announce anything. “It’s not that we are late,” he said.
June FCC deadline: Check
On the ground, the Boost Mobile network now has 24,000 5G sites on air as of the end of Q1. That’s providing broadband coverage to over 80% of the U.S. population and in combination with its MVNO deals with T-Mobile and AT&T, it offers 99% coverage across the U.S., said President of Technology and COO John Swieringa.
Swieringa also said that Boost has met its June 14 FCC requirement by deploying 3GPP Release 17, a key enabler for 5G Advanced, across its network. But overall, its network spending is going down, at least until it gets closer to the next FCC buildout requirement in 2026. The company’s cap ex was $164 million in Q1 2025 versus $391 million in Q1 of 2024.
Boost is trying to migrate as much traffic as possible onto its own network vs. its MVNO partners T-Mobile and AT&T because it provides better owner economics. Of the 7.15 million customers Boost serves, more than 1.25 million of them are now on its own network and they’re loading more than 75% of compatible devices onto its network, Swieringa said.
EchoStar's future
EchoStar appears to be in better shape than it was a year ago, but it reported a loss of about $202.7 million in Q1 and investment analysts continue to talk about when, not if, the company will file for bankruptcy. In wireless, it’s tough to build a network from scratch and compete with three big established players, try as it might.
According to MoffettNathanson analyst Craig Moffett, bankruptcy would be viewed by many equity investors as a good thing, expediting the liquidation of a collection of assets that are the reason they’re holding onto EchoStar stock.
“If a bankruptcy were to eliminate EchoStar’s tower lease obligations, well, all the better; those obligations are simply another layer of senior debt. More for everyone else,” he wrote in a May 9 report.
That leaves the big question of what happens to its spectrum. New Street Research analysts believe management will keep trying to create a viable business until the second half of 2026 and that’s when a spectrum sale is most likely to occur.
But who knows? Akhavan declined to make forward-looking statements about Q2 that would get him into trouble with his legal team or regulators. Of course, he’s trying to put a positive spin on it. “We are on a growth path and we're not going to look back,” he said.