EchoStar is combining access to a pair of assets in an attempt to enhance the attractiveness of both products and hopefully stabilize the beleaguered company’s operating performance.

The move combines EchoStar’s Dish Network satellite-TV service with its Hughes Network Systems satellite internet offering. The combo is being targeted at rural customers who might lack a sufficient choice or even basic access to these services from other providers, and if selected will include a $5 discount for the combination.

Hughes COO Paul Gaske said the move taps into the company’s launch last year of its Jupiter-3 satellite, “which is the largest commercial satellite that has ever launched and that provides broadband services to North America and South America.”

Gaske said that satellite is able to provide downlink speeds of up to 100 Mb/s, which aligns with a recent government mandate on how it defines “advanced telecommunications capability for fixed broadband.”

That option should find a welcome audience. The Federal Communications Commission (FCC) recently found approximately 28% of people living in rural areas and 23% of people living on Tribal lands lacked access to that broadband speed target.

That potential success would also help EchoStar’s sagging Dish satellite-TV service.

“The truth is bundles work,” Gary Schanman, EVP and group president for Dish Video Services said. “We really care about our customers in rural America and our services are really perfect, especially for rural America. To be able to offer them something special, we get hundreds of dollars of discounts over a two-year period where we make sure that their price can be stable over that period of time, it's something that we've really never done and we've never really been able to, and now we're going to do it with a full effort.”

Both executives noted that the combined offer is also a step toward stabilizing their respective offerings.

Dish’s satellite-TV service lost 213,000 subscribers during its most recent quarter and its streaming-based Sling TV service lost an additional 135,000 customers. These latest losses came on the heels of their combined operations losing more than 1.2 million customers in 2023.

“The truth is we all face headwinds in this space,” Schanman said. “In a lot of cases, there's a choice, even in very rural markets, and we want to basically delight customers. So, yes, we have very big aspirations for how this can help us with our customer base across the board in a number of ways and having Jupiter-3 be such an amazing asset to offer, and then having us be able to offer internet on the side for the first time ever really in a way that that's compelling, is great on our end.”

Schanman said Dish Video Services has also been seeing “noise” from fixed-wireless access (FWA) services as a competitor on the video side, but it’s also helping Dish in that it’s giving consumers more confidence to “untether from the cable bundle.”

“We do see on the Dish side a decent amount of people coming in that actually take Dish because they like our video service, because we’re actually investing in it, and then they say, ‘well, I'll get T-Mobile around the edges,’” Schanman said.

EchoStar’s management has stated that FWA was not in the immediate cards for its Dish Wireless operations, despite that market segment seeing explosive growth over the past few years.

Hughes witnessed greater stabilization during the most recent quarter, losing just 26,000 connections compared to a loss of 51,000 connections during the first quarter of 2023.

That stabilization is an important first step for the broader EchoStar operations, which is currently walking a financial tightrope.

This was highlighted by CTO Paul Orban explaining during the last earnings call that EchoStar was sitting on $766 million in cash at the end of the first quarter. This followed the company paying out $2.4 billion on a debt maturity that came due during the quarter.

The more pressing matter is a $2 billion debt maturity that is set to come due in November.

“We do not currently have the necessary cash on hand or projected future cash flows to fund fourth quarter operations or the November 2024 debt maturity,” Orban told investors during the earnings call.

CEO Hamid Akhavan did note that EchoStar is working “on a number of avenues” toward attracting new financing, and remains focused on stabilizing operations.

“Right now, my focus more than anything else is to address the two significant challenges ahead of us,” Akhavan said. “One is, as I mentioned, just immediate financing needs, and second is getting our business operationally to the point where, post-financing challenges overcome, having a business that is sustainable and is generating significant economic value, and those two priorities right now are taking I would say, 99% of my time.”

However, analysts remain skeptical.

“Besides the upcoming maturity in November, EchoStar has $9 billion of debt maturing in 2026,” Gimmie Credit financial analyst Dave Novosel noted in a recent report. “So while the immediate funding needs are material, the longer-term needs are substantial. We just don’t see enough potential for subscriber and revenue growth, as well as meaningful free cash flow, in the near term.”

EchoStar executives are obviously aware of this challenge, but also know they need to focus on what they can do in the near term to steer the situation.

“We see this in terms of stabilization as one leg of the stool,” Gaske added. “We identified that for the Jupiter-Hughesnet subscribers we had stabilized that base a lot better than we had, but still we have some growth issues there, but things like this show we are reaching out to go look what we can do.”