EchoStar reported customer losses across all of its business segments during the second quarter of 2024, as the possibility of bankruptcy looms.

The company, which completed its merger with Dish Network earlier this year in a move that reunited the two companies, is currently working to refinance $2 billion in debt due in November.

At present, however, the company said it doesn't have that money.

"Roughly $2 billion of debt will be maturing this November, and currently, we do not have the necessary cash on hand and projected future cash flows to fund fourth quarter operations or the November 2024 debt maturity," said Paul Orban, EchoStar CFO and EVP, in an earnings call last week.

The comments were almost identical to the ones made back in May by Orban.

The company's situation is so dire that a senior industry analyst is almost certain to go bankrupt.

"We've made our view clear. We see EchoStar’s odds of success as a wireless operator to be vanishingly small," said a MoffettNathanson research note from analyst Craig Moffett. "We believe EchoStar is instead highly likely to go bankrupt, quite possibly by the end of the year."

Moffett's stance on the company has not changed, issuing a similar warning in May after EchoStar had announced its first quarter results.

EchoStar reported total revenue of $7.97bn for the six months ending June 30, 2024, compared to $8.74bn last year for the same period. Meanwhile, net losses for the first two quarters were $312.97m, compared to profits of $466.2 million during the first half of last year.

Dip in subs

The company's struggles were reflected in its earnings, as pay TV, broadband, and wireless all reported a drop in subscription numbers.

For the quarter, wireless subscribers dropped by around 16,000, though this was much less than the 188,000 in the same quarter last year. Broadband net subscribers decreased by approximately 23,000 in the second quarter, while it shed 104,000 pay-TV customers.

To reduce its cash burn, EchoStar revealed that it invested $237 million into its network deployment during Q2, significantly less than the $802m it invested in Q2 last year.

The company reported an increase in revenues for its 5G network deployment to $35.51m, up from $19.30 million last year.

This would have been helped by Dish hitting its 5G coverage target set by the Federal Communications Commission (FCC) last year, to deliver 5G service to 70 percent of the US population.

Hamid Akhavan, president and CEO, EchoStar Corporation, said the company is in constructive discussions to address necessary financing.

Among the options on the table is a sale of spectrum assets, something which was mentioned in the earnings call.

The majority of the spectrum EchoStar gained following its merger with Dish is unencumbered, meaning it could be sold off, auctioned, or used to pay down the debt.

“We have significant ability to lever our spectrum and create liquidity for many, many years to come,” said Akhavan.

Moffett has also identified the spectrum holdings as a potential lifeline for EchoStar.

In March, Dish said it couldn't pay for T-Mobile's 800MHz spectrum that it had agreed to purchase for $3.59bn.

Dish had been granted an extension until April 1, paying a $100 million extension fee.

As part of T-Mobile's merger and acquisition of Sprint in 2020, the operator agreed to sell its 800MHz spectrum to Dish.

EchoStar was spun out from Dish back in 2008. The split saw Dish retain its TV business while it shed the satellite infrastructure that beamed content into them. Both companies are owned by billionaire Charles Ergen.