DBSIndustries and EchoStar Form Joint Venture E-SAT to Provide Global Communications Services

Strategic Insights -

DBSIndustries, Inc. and EchoStar Communications Corporation have formed a new company called E-SAT to provide global data messaging and data retrieval services for various industries. The joint venture has filed an application with the Federal Communications Commission (FCC) to construct, launch, and operate six satellites in the Non-Voice, Non-Geo (NVNG) frequency band. EchoStar, a leading manufacturer of direct-to-home satellite broadcasting receivers, will own 80% of E-SAT and provide the necessary funds for the construction and launch of the first two satellites.

Key Takeaways:

  • DBSIndustries and EchoStar have formed a joint venture called E-SAT to provide global data messaging and data retrieval services for public utilities, oil and gas companies, direct-to-home television broadcast services, and the financial services industry.
  • E-SAT plans to operate six satellites in the NVNG frequency band, which will provide services across the globe.
  • EchoStar, which owns 80% of E-SAT, has committed to investing $30 million in the first two satellites and the operation of the E-SAT system for the first year of service.
  • EchoStar's commitment includes providing the necessary funds for the construction and launch of the first two satellites, which will be built by DBSI.
  • DBSI will manage the design and construction of the satellite system.
  • E-SAT has filed comments with the FCC urging the agency to clear additional frequency bands for Mobile Satellite Services (MSS) below 1 GHz.
  • The joint venture plans to launch its first Direct Broadcast Satellite (DBS) on a Chinese Long March rocket in the fall of 1995, followed by DBS service to U.S. markets in early 1996.

Statistics:

  • The estimated investment in the first two satellites will be $30 million, provided by EchoStar as part of its ownership commitment.
  • EchoStar completed a $625 million debt offering last year, which will be used to support its satellite operations.
  • The total cost of constructing and launching the six satellites has not been disclosed.
  • The joint venture plans to launch its DBS service to U.S. markets in early 1996.

Sources:

  • DBSIndustries, Inc. (Nasdaq Electronic Bulletin Board: DBSI)
  • EchoStar Communications Corporation
  • Federal Communications Commission (FCC)
  • Donaldson, Lufkin & Jenrette (EchoStar's financial advisor)
  • Sky Ladder Communications (PR agency for DBSIndustries and E-SAT)