DISH Network Corp. is taking possession of the “over-the-top” and direct broadcast satellite assets that until now have been owned by EchoStar Corporation.
The two closely intertwined companies on Tuesday executed an agreement that sees the transfer of EchoStar Technologies hardware and software development group, EchoStar’s national and regional uplink business, and EchoStar’s managed fiber backhaul network, and its OTT development group to DISH.
The managed fiber backhaul network serves all U.S. DMAs.
In exchange, DISH will give EchoStar an 80% financial interest in Hughes Retail Group, held in the form of a tracking stock.
This transaction also transfers to DISH the 10% stake in Sling TV held by EchoStar, wireless spectrum licenses covering four markets in the 28 GHz band, and certain real estate properties.
DISH notes that it will continue to market satellite broadband under the brand dishNET to rural customers.
“With this transaction we will vertically integrate all the elements that define our customer experience – one team will deliver the full DISH and Sling TV experience end to end,” DISH President Erik Carlson explained. “Not only do we gain full control of product development roadmap for DBS and Sling TV but we also anticipate achieving operational efficiencies.”
The transaction is structured in a manner to be a tax-free exchange. It is expected to close in Q1 2017, subject to satisfaction or waiver of closing conditions.