Debt and regulatory issues haunt EchoStar D2D LEO project

EchoStar kicked off August 2025 by hitting the news wire hard, announcing ambitious plans for a $5bn low Earth orbit (LEO) direct-to-device (D2D) satellite constellation, on the very same day that the company released its Q2 2025 financial results and filed its 10-Q report with the Security and Exchange Commission (SEC).

The combination made for a jarring contrast; the disconnect between EchoStar’s long-term D2D sat-to-cell ambitions and the near-term realities confronting the company is vast.

It is impossible to divorce EchoStar’s constellation news from the hurdles in front of the company: Revenue remains on the decline, the mobile outfit’s operating loss swelled in Q2 2025, a looming debt cliff threatens to capsise its 5G network buildout efforts, ‘going concern’ worries have resurfaced, and the company’s ongoing skirmish with Federal Communications Commission (FCC) Chair Brendan Carr involves the very spectrum necessary for its proposed D2D LEO constellation.

Translation: The prognosis on EchoStar ever getting its D2D effort up and running isn’t good.

Taking EchoStar’s sat-to-cell pitch on its merits

Setting aside for one moment the laundry list of concerns circling EchoStar: Launching a D2D solution would seem a no-brainer for a company with EchoStar’s mix of terrestrial and non-terrestrial assets. Assuming the company stays right side up – an enormous ‘if,’ to be sure – EchoStar’s LEO constellation would leverage open radio access network (RAN) technology and enable talk, text, and data directly to 5G devices. The wholesale opportunity could prove substantial for EchoStar, complementing terrestrial networks just as every major mobile network operator is reckoning with how non-terrestrial network functionality could eradicate cellular dead zones.

During EchoStar’s Q2 2025 earnings presentation, CEO Hamid Akhavan pitched investors on the idea that its LEO will have limited competition, falling between the satellite fixed broadband space where Starlink dominates and the limited-bandwidth emergency messaging capabilities from AST SpaceMobile and device OEMs.

According to Akhavan, EchoStar’s “wideband” would represent “the natural use case of your mobile phone, the way you use it today.” From there, Akhavan noted that the market is “perhaps crowded in the broadband space” and “may be crowded at some point in the narrowband space,” before claiming nobody is doing what EchoStar calls “wideband” in the space between those opportunities.

However, Akhavan’s rhetoric leaves off one rather significant consideration: Starlink has spent the last few years launching a constellation targeting that very opportunity. Using Starlink’s T-Mobile US partnership as an example – while also noting that Starlink has D2D relationships with operators all over the globe – the functionality implied by the EchoStar execs dovetails with what is on the T-Satellite service roadmap. Starlink will be driving down this lane long before EchoStar arrives.

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The elephant in the room: Regulatory and financial troubles

EchoStar will face major challenges moving forward on its AWS-4 spectrum licenses given its ongoing dispute with the FCC, the agency’s review of EchoStar’s license obligations, and the reported push from the FCC to sell the spectrum. Meanwhile, EchoStar says that the FCC’s current investigation into its spectrum licenses has frozen the company’s 5G network buildout. In an ongoing game of brinksmanship with the regulator, the company also claims the investigation is responsible for delayed interest payments on its debt load in May and June 2025.

Not helping matters in the least is the cratering in EchoStar’s balance sheet, where its total revenue dropped by 5.8% year-over-year in Q2 2025. While the operator notched its best-ever net mobile line additions in Q2 2025 (+212,000 for the quarter), that result came at great expense – specifically an escalating operating loss from the wireless business, which hit -$452m for the quarter.

In EchoStar’s own words, from its 10-Q filing with the SEC for Q2 2025: “We currently do not have the necessary cash on hand, projected future cash flows, or committed financing to fund our obligations over the next twelve months, which raises substantial doubt about our ability to continue as a going concern.”

While EchoStar’s decades of experience in satellite communications and work building out a 5G network could have left the company uniquely situated for the D2D sat-to-cell opportunity, announcing a $5bn endeavor while facing severe financial woes and serving up ‘going concern’ warnings strains credulity.

"Debt and regulatory issues haunt EchoStar D2D LEO project" was originally created and published by Verdict, a GlobalData owned brand.

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