EchoStar Skips $183M Interest Payment Amid FCC Probe, Shares Fall 3.6%

EchoStar Corp. is skipping interest payments on $183 million bonds due to "uncertainty" raised by an FCC review of its compliance with 5G network obligations. The company has a 30-day grace period to make the payment. Shares fell 3.6% and the 7.75% note due 2026 dropped over 1 cent to 84 cents on the dollar. EchoStar is controlled by billionaire Charlie Ergen.

EchoStar Corp. (NASDAQ: SATS) has decided to forgo an interest payment on $183 million of bonds due to uncertainty arising from an ongoing review by the Federal Communications Commission (FCC) regarding its compliance with 5G network obligations. The company has a 30-day grace period to make the payment.

The FCC initiated a review of EchoStar’s adherence to its federal commitments on May 9, 2025, 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.

The uncertainty surrounding EchoStar’s spectrum rights has hindered its decision-making capabilities, particularly 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 interest payment to allow the FCC time to respond to its request for relief before the grace period ends.

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 a 3.6% decline in its stock price. The 7.75% note due 2026 dropped over 1 cent to 84 cents on the dollar.

The company aims to continue its network buildout and expand its Boost business and MSS service with confidence, pending the FCC’s decision. EchoStar is controlled by billionaire Charlie Ergen.

References:
[1] https://uk.investing.com/news/stock-market-news/echostar-stock-falls-amid-fcc-review-and-missed-payment-4112099