TAMPA, Fla. — Satellite TV broadcaster and terrestrial wireless operator Dish Network announced plans Aug. 8 to merge with EchoStar, its sister company focused on providing broadband services from space.

Dish shareholders would own 69% of the combined group while EchoStar investors would hold the rest if their all-stock transaction clears regulatory approvals. 

The companies, both controlled by billionaire Charlie Ergen, expect to complete the merger later this year, creating a terrestrial and space connectivity giant that made a combined $4.5 billion in revenues for the three months ended June 30.

The long-rumored deal comes as Dish’s financial resources come under strain as it invests heavily in deploying a 5G network across the United States while its legacy satellite TV business loses subscribers.

In contrast, EchoStar had $1.9 billion in cash reserves as of June 30, and expects to significantly grow broadband subscribers following the successful launch of Jupiter-3 last month.

However, EchoStar also faces mounting competition from SpaceX’s rapidly expanding Starlink broadband network and terrestrial telcos focused on rural subscribers.

The “connectivity landscape is rapidly changing,” said EchoStar chief executive Hamid Akhavan, who would serve as CEO of the combined company.

He said the merger would enable the group to provide a broader range of improved connectivity services by combining technology, spectrum, engineering, manufacturing, and network management resources.

Ergen would be executive chair for the group once the transaction closes, and Dish CEO Erik Carlson would leave the company.

The transaction would exchange each EchoStar share for 2.85 shares of Dish common stock, representing a 12.9% premium for EchoStar shareholders as of July 5 — the last full trading day before media speculation resurfaced about a potential merger.

Dish was split from EchoStar in 2008 as part of its push to expand beyond satellite TV and into terrestrial mobile services and online streaming. 

Jason Rainbow writes about satellite telecom, space finance and commercial markets for SpaceNews. He has spent more than a decade covering the global space industry as a business journalist. Previously, he was Group Editor-in-Chief for Finance Information...