EchoStar Corporation (NASDAQ:SATS) saw its stock drop 21% after the company chose to skip a major interest payment due May 30, amid ongoing regulatory scrutiny. The satellite communications firm is currently under investigation by the Federal Communications Commission (FCC) over its compliance with federal 5G service obligations in the U.S.
On May 9, 2025, the FCC initiated a review of EchoStar’s adherence to its commitments, specifically examining an extension granted in September 2024 for its network buildout and the use of mobile-satellite services in the 2GHz frequency band. EchoStar submitted a response on May 27, which is publicly accessible via the FCC’s website.
This regulatory review threatens to revoke previous FCC approvals, casting uncertainty over EchoStar’s spectrum rights. This has complicated the company’s strategic decisions regarding its Boost business, forcing it to reassess network expansion plans and resource allocation. As a result, EchoStar deferred an interest payment of about $326 million on its 10.75% senior spectrum secured notes maturing in 2029.
The missed payment places EchoStar in default under the terms of its 2029 Spectrum Notes indenture, triggering a 30-day grace period before the default escalates. The company intentionally delayed payment to allow time for the FCC to respond to its request for relief within the grace window. EchoStar remains focused on continuing its network deployment and growing its Boost and mobile satellite service (MSS) operations, pending the FCC’s ruling.
Despite affirmations in SEC and FCC filings that all 5G buildout targets have been met, the ongoing FCC review has cast doubt on EchoStar’s future, contributing to the sharp decline in its stock value.