EchoStar stated in a regulatory filing it elected to skip a $326 million cash interest payment due to uncertainty over the Federal Communication Commission’s (FCC) inquiries into its Boost Mobile network build out and unused spectrum.
In a filing today (30 May) with the US Securities and Exchange Commission, Charlie Ergen-controlled EchoStar stated it won’t make the cash interest payment on its 10.75 per cent senior spectrum notes due 2029.
EchoStar noted in the filing it has a 30-day grace period to make the interest payment “before such non-payment constitutes an Event of Default”.
FCC chair Brendan Carr sent a letter to EchoStar on 9 May. As part of a public notice, the FCC is determining whether EchoStar plans to utilise its mobile satellite services (MSS) operations in the 2GHz band after SpaceX questioned its use.
In a separate public notice, the FCC is also looking into EchoStar’s compliance with its 5G buildout milestones.
“This uncertainty over our spectrum rights has effectively frozen our ability to make decisions regarding our Boost business, including continued network buildout and adversely impacts our ability to implement and adjust our overall business plan and requires us to re-evaluate the deployment of our resources,” EchoStar explained in today’s filing.
EchoStar also stated it is confident the company has met and fully demonstrated “all applicable 5G buildout milestones”.
In a 90-page filing on 27 May with the FCC, EchoStar stated the agency’s “actions have created a dark cloud of uncertainty” over its spectrum rights and open RAN 5G network.
“This cloud has effectively frozen EchoStar’s decision making—it cannot reasonably invest more capital into a buildout if the Commission indicates it may take away its licences through unprecedented actions,” according to the FCC filing.
Bloomberg reported EchoStar has debt maturities of approximately $7 billion through 2026.