About James Defranco
James Defranco, Director and Executive Vice President at EchoStar, was represented in a CNBC interview by CEO Hamid Akhavan, who discussed the company's acquisition of Dish Network by DirecTV. Akhavan stated that the deal was done at the "right time" due to the decline of traditional content distribution to streaming, and that it would allow EchoStar to negotiate better deals with programmers and offer smaller packages to consumers. He also said the deal reduces EchoStar's debt and allows the company to focus on its wireless business, which he described as "nascent and growing with tremendous opportunity."
Akhavan outlined EchoStar's strategy for its Boost Mobile brand, including a promotion offering one year of free service with no contract or obligations. He argued that the U.S. telecommunications market, dominated by three carriers with over 120 million subscribers each, is not competitive enough, and that EchoStar is entering with advantages such as a 5G network with open interfaces, nationwide roaming partners, and no legacy cost structure. He said the company plans to offer "disruptive single plans" and that pre- and post-paid distinctions are outdated, as consumers want flexible payment options.
Source: AI-verified profile updated from James Defranco's recent appearances.
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Transcript (10 segments)
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Host0:01
Broadcast satellite. Take a look at shares of EchoStar down sharply. Let's get more on this complex deal with the CEO of EchoStar. Hamid Akhavan joins me right here. Market not taking it particularly well. We'll get to that in a minute. Let's sort of start off on why we chose to go down this road. Why do this deal?
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Hamid Akhavan0:21
Great to be here, David. Thank you for the opportunity. Look, I think it was the right time to do this. I think the industry, the content industry, the distribution of content distribution industry, has been on a decline losing customers in a rapid pace to the streaming. I think there's been attacks by the programmers, by the new tech and it's the right time to bring the companies together to create a company that ultimately had enough ability to negotiate better deals with the programmers and bring smaller packages to the market, which consumers are asking. I think this was the scale game that kind of puts us in a level playing field with the competitors in the market. So that's one angle. The other angle is we have a wireless business that is nascent and growing and we have a tremendous opportunity there. We couldn't feed that business properly. This was a challenge for us, and just the focus of the company being in multiple directions was also a management distraction. This is all of that in one.
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Host1:23
I've tried to go through what is a very complex deal from the capital structure point of view, but essentially, it reduces your outstanding debt, and it puts your maturities further out into the future. Allowing you to do what with this wireless business?
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Hamid Akhavan1:40
This is the largest telecommunication market in the world by far and away. So much in this market with AI and additional technology advantages coming into the market. Three carriers is not enough. I mean most other countries have more that are smaller, and I think there's a dominance between the three carriers that are there each having more than 120 million subscribers, and there's not much trading happening in a consumer space kind of plateaued. We are entering this market with a new technology, with a new attitude and a new ability to shape this market and we're going to take advantage of that.
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Host2:17
What do you mean new attitude? Attitude may not be enough to win the hearts and minds of consumers. You have to come with a product that will work at a price they are willing to pay.
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Hamid Akhavan2:27
We're doing that. Today we have a year worth of free service with no obligations, no contract, no trading, no obligations of any kind, come in, buy a phone, and you get one year worth of free service. I would like to see if the others can try that. It is a — we are just warming up. There's a lot we can do in this marketplace.
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Host2:48
What are you going to do over the next few years? Investors today are trying to understand this. They're looking at a company that is, again, going to reduce its debt, certainly, significantly, but getting rid of most of its cash flow as well. So how do you deploy capital to get to this position you're talking about where you can be a realistic competitor to AT&T, T-Mobile and Verizon?
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Hamid Akhavan3:09
We don't have any legacy. From a cost structure, agility perspective we have advantages others don't have. We have a 5G network with open interfaces and we can be nimble and we can manage our cost structure better. Plus the fact that we're relying on two networks nationwide roaming partners for us. We immediately and already have arguably the best coverage in the nation access to more towers than anybody else. We can concentrate our focus where we can make the biggest competition and concentration of our capital and success. The times are different than when the other guys were in the market. Now we're walking in with those advantages, and just watch us. We certainly are planning to offer disruptive plans.
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Host3:58
What plan are you going to offer this under?
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Hamid Akhavan4:01
Boost Mobile. We're the first ones and I think other times others will come to the conclusion, they are not different products. 40 years ago when we started in the mobile business that's the way the segmentation made sense. Today that doesn't make sense. We think pre and post paid are preferences for payment and consumers want a choice in between and consumers want to pay some down payment, whatever they feel like paying, pay the full amount, don't want divided.
