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Welcome, everyone. Thank you for joining us today. This past year marked the beginning of a transformation for EchoStar Corporation as we continue to strengthen our business to compete at a larger scale in the global telecommunications market. At the beginning of 2024, we brought two great companies together, EchoStar Corporation and DISH Network. The merger combined DISH Network satellite technology, video services, retail wireless business, and nationwide terrestrial 5G network, with EchoStar Corporation's premier satellite communications, enterprise go-to-market capabilities, U.S.-based manufacturing, creating one company with the broadest portfolio of assets in the telecom, media, and space verticals. Integrating and leveraging these valuable assets allows us to provide unique solutions like direct mobile phone to satellite connectivity, under one entity. Over the past year, we enacted a plan to improve our capital structure, leverage synergies across business units, reset Boost Mobile, continue to expand and optimize Boost's state-of-the-art, open RAN 5G wireless network, and drive value for our shareholders. I'm pleased with the dedication and resiliency of our teams in executing against this plan and managing costs across the board to create shareholder value. As for our operating results, the Pay TV segment improved over prior year results on most key metrics, including churn, ARPU, and SAC. Our Hughes business includes both HughesNet, our consumer brand, and the Hughes enterprise business. Among other assets, both leverage the most sophisticated commercial satellite in the world, Jupiter 3, which delivers more than 500 gigabits per second of broadband capacity. As we increased our focus on the enterprise markets, teams worked to make further inroads with in-flight aviation products and services, DOD contracts, and growth in our managed services arm for which we were named for the second year in a row a leader in the Gartner Magic Quadrant. Boost Mobile made steady progress throughout the year. Excluding the impact of ACP, our efforts resulted in consecutive quarter-over-quarter net positive subscriber growth since Q1 of 2024. Boost Mobile also saw improved churn and achieved significant lift in ARPU. These gains are a bellwether of things to come. We continue to enhance our network and met our 80% FCC coverage commitments by the end of the year. In addition, the Boost Mobile Network was recognized last month as the number one mobile network in New York City by a third-party industry benchmarking expert. This is a testament to the hard work of our network engineering teams and the excellence of our technical infrastructure. Drawing upon two of our exceptional assets, EchoStar Corporation is uniquely positioned as both a satellite and mobile service provider to develop solutions with a global impact. Our portfolio of products and our unique spectrum assets put us in the advantageous position to offer such solutions as direct satellite to device connectivity, a service we have in operation since 2023 through partners in certain international markets. We are already hard at work on the most capable offering of this technology and we look forward to keeping you updated on our progress in this exciting space. Collectively, for the year, we made progress towards our goals while realigning the business, addressing financial needs, establishing a firm foundation. For 2025, we are focused on maximizing the use of our available resources to gain market share and accelerate value creation. I would like to turn it over to Paul Orban for commentary and color on the numbers.
Hey, thank you, Hamid. At the end of the fourth quarter, our total cash and marketable securities was $5.7 billion, reflecting an increase of $3 billion compared to the prior quarter. This improvement was primarily driven by a series of financing transactions that raised $5.6 billion in net proceeds, partially offset by the repayment of approximately $2 billion of DISH DBS senior notes in November. In addition, we recognized a $689 million gain on debt extinguishment, the successful exchange of $4.7 billion of our convertible notes, and extended those maturities to 2030. EchoStar Corporation generated positive operating free cash flow in 2024, defined as free cash flow before debt service payments and non-operating CapEx, which was in line with our expectations. Looking to 2025, we expect to maintain positive operating free cash flow as we remain disciplined in managing our operating cost structure while continuing to grow our wireless business. Free cash flow, including debt service, in 2024, was a negative $1.2 billion. That's an improvement of approximately $500 million compared to the prior year. We reduced CapEx excluding capitalized interest by over 50% in 2024, $1.5 billion, which is in line with our prior guidance. We expect CapEx will decline in 2025 as our 5G build-out deadlines were extended. Let's review our financial performance for the fourth quarter and for the full year of 2024. Revenue was approximately $4 billion in the fourth quarter, down 5% year-over-year primarily due to fewer subscribers at Pay TV and Hughes compared to the prior year. OIBDA was $397 million in the fourth quarter, an increase of $9 million year-over-year adjusted for the 2023 noncash asset impairment charge. Improvement was driven by more efficient Boost Mobile marketing, partially offset by a slight decline in Pay TV OIBDA due to fewer subscribers. For the full year 2024, consolidated revenue was $15.8 billion. It's down 7% year-over-year due to subscriber declines in each of our segments. OIBDA was $1.6 billion in 2024, down from $2.1 billion in 2023, excluding last year's noncash impairment charges. The reduction in OIBDA was driven by lower average subscribers and higher wireless network spend, partially offset by a reduction in SaaS and cost savings from G&A. Lastly, I'd like to provide a brief update on our segment structure. Historically, we have reported four segments: ATV, retail wireless, 5G network deployment, and broadband and satellite services. To align with how we view and manage the business, we combine the retail wireless and 5G network deployment segments into a single segment now called Wireless. This change reflects a more integrated approach to how we operate and manage these businesses and is in line with industry practices. With that, I'd like to turn it over to Gary to discuss video services.
Thanks, Paul. In Q4 and throughout 2024, our Pay TV businesses fared well despite industry headwinds. In 2024, we achieved a year-over-year ARPU increase of 4.2% across Pay TV. Our cost optimization work continues, and we yielded year-over-year SG&A and variable cost savings, and these efforts drove substantial increases in OIBDA per subscriber versus the prior year. Across both services, we also leveraged our native proprietary AI and ML capability to better identify, attract, and retain quality customers, leading to a reduced marketing stack and significant churn reductions. For DISH TV, we finished the year with approximately 5.7 million subscribers with 2024 churn at 1.46%, a 23 basis point improvement versus last year. SAC per activation also improved 10.5% year-over-year, driven by increased marketing efficiencies. Our lower year-over-year churn is really attributable to our data-driven retention efforts, our improved DISH TV Hopper UX that we launched, our bundled Netflix offer for DISH TV customers, and our lack of programmer blackouts. We also drove incremental ARPU via the introduction of our disconnected set-top box programmatic advertising capability last year. On the Sling side, we finished the year with approximately 2.1 million subscribers, a year-over-year increase of almost 40,000 customers. We saw a churn improvement of 141 basis points year-over-year. That's our lowest level since the pandemic. And lower year-over-year SAC increased our marketing ROI. In 2024, on Sling, we launched many new product features, including freestream DVR, arcade, and our rewards program. Late in Q4, we launched our unlimited storage DVR replay feature, which provides consumers with unparalleled access to the best of live TV on their own schedule. These differentiated product features and our focus on quality resulted in 21 straight months of viewership growth and extended our lead in live TV streaming quality. We are especially proud that we were recognized as the best live TV streaming service by both U.S. News & World Report and Tom's Guide. We're well positioned for 2025. Our main focus in 2025 is to better integrate and cross-sell our products with the Boost Mobile and Hughes product portfolios. Our first effort is the recent launch of Sling within our Boost Mobile app, providing our wireless customers added value with free content, and we'll continue to more deeply integrate our content experiences into Boost Mobile to help support wireless growth. I'll now turn it over to Paul Gaske, who will cover broadband and satellite services.
Thank you, Gary. Our broadband and satellite services segment operates in the consumer, enterprise, aero, and government markets. Our HughesNet consumer business continues to add subscribers on our Jupiter 3 satellite, offering affordable high-speed unlimited data service plans to new customers, while simultaneously providing high-value upgrades to existing customers. We closed 2024 with approximately 880,000 subscribers. Our satisfaction surveys continue to show that customers like our new plans, confirming that our Jupiter 3 satellite and platform are delivering a quality experience. Our focus remains as in previous quarters on acquiring and retaining high-value customers for HughesNet. Our North American enterprise managed services business signed several major contracts to upgrade network infrastructure, provide managed Wi-Fi access, offer network management, and launch our latest cybersecurity services. Hughes was selected over larger competitors because of our superior support and service offerings. Additionally, our Hughes managed LEO business has now shipped over 15,000 Hughes-manufactured user terminals. Feedback from our customers continues to be very positive. Our in-flight connectivity business signed an expanded contract with Delta Air Lines to provide in-flight connectivity for future new deliveries of select A350 and A321neo aircraft. This expanded contract features the Hughes Fusion multi-orbit in-flight connectivity solutions, an industry-first technology tailored for commercial aviation that simultaneously blends LEO and GEO satellite capacity at Ka and Ku frequency bands. The multi-orbit and multi-band capability allows Delta to utilize worldwide capacity to deliver an industry-leading passenger experience. Our unique network architecture for inflight connectivity is experiencing increased interest from airlines around the world. In our government and defense business, we continue to execute on our contracts with the DOD for 5G Open RAN networks and DOD installations with the U.S. Navy at Whitby Island and Hawaii, as well as with the U.S. Army at Fort Bliss, Texas. These awards add to the growing number of U.S. military installations the capabilities Hughes can provide including program and network management, alongside Boost Mobile's leading-edge 5G technology and network. In 2024, Hughes was the only satellite connectivity and telecom business recognized as a leader in the Gartner Magic Quadrant for Managed Network Services. This is the second year in a row for Hughes to win this award, which is a testament to our capabilities. Additionally, Hughes was also named the 2024 Managed Security Service Provider of the Year by Cybersecurity Breakthrough. The award recognized Hughes as a leader in providing businesses of all sizes with managed network and security solutions. Our international managed services business recently earned several multi-million dollar contracts in India and Brazil, providing connectivity for more than 3,000 schools and multiple energy companies. Increasingly, international business customers are selecting Hughes for managed services in addition to capacity. Globally, we see continued interest in our Jupiter ground system with new contracts expected throughout 2025. With that, I will turn it back to Hamid for an update on Boost Mobile.
Thank you, Paul. Regarding Boost Mobile, we made significant progress in 2024 toward our goals of optimizing marketing and acquisition techniques, simplifying and differentiating consumer offers, and strengthening device parity all while increasing on-net usage to take advantage of owner economics. The new Boost Mobile has made steady progress since its launch midyear with a host of prepaid and postpaid plans under one cohesive brand. We also launched differentiated offerings like one free year of service with the purchase of a qualified device and a 30-day money-back guarantee risk-free. Strengthening product parity was an important objective for us this year. Through the introduction of more devices that are compatible with the Boost Mobile network, our product portfolio continues to expand allowing for increased customer profitability. Additionally, we increased our distribution through an expanded relationship with Apple with customers now able to purchase and activate Boost Mobile service through Apple retail channels alongside the nationwide incumbents. We plan to further invest and grow our distribution footprint in 2025. Excluding the impact of ACP, our efforts resulted in consecutive quarter-over-quarter net positive subscriber growth since the first quarter of 2024. We finished 2024 with approximately 7 million wireless subscribers with a growth of 90,000 net subscribers in the fourth quarter. In addition to these promising subscriber trends, Boost Mobile is acquiring higher quality customers as evidenced by our 28% improvement in churn year-over-year and increases in take rates for autopay and the highest ARPU across the wireless prepaid market. We will continue to build upon this momentum, capitalize on operational improvements, and leverage our new go-to-market approach in 2025. Let me now hand the call to John to cover our network deployment progress.
Thank you, Hamid. We are the world leader in developing and operationalizing a cloud-native Open RAN 5G network. In 2024, we further expanded our leadership and innovation in this space, as we've proven our American-led Open RAN architecture provides competitive wireless services for consumers and businesses. Our software-defined, scalable architecture allows us to continually improve the performance and efficiency of our network and rapidly deploy new solutions. Additionally, our Boost Mobile network architecture is well-positioned to support Gen AI use cases and workloads. In 2024, we invested $1.1 billion in CapEx for network deployment, in addition to the $2.6 billion in 2023. We continue to be disciplined in our approach as we transition from building our network to running, optimizing, and monetizing it. During the fourth quarter, we met our latest FCC milestone by extending our 5G broadband coverage to over 80% of Americans, which is more than 268 million people. With this achievement, we now have over 23,000 sites on air. We also added to our 5G voice coverage, now offering VoNR to more than 220 million Americans in over 100 markets with successful network launches in Boston, Seattle, and Pittsburgh. We've already deployed 3GPP Release 17 across our network, and we're well on our way to achieving 24,000 sites on air by June 14, 2025. In alignment with our new FCC framework, which allows us to more efficiently build out our network and increase competition in highly populated areas, along with the expansion of our network, we are also observing increasingly competitive network performance metrics. In many markets, our network is already outperforming our competitors. Recently, the Boost Mobile Network was awarded by a key third-party benchmark survey as the best overall mobile network in New York City. We anticipate highlighting more head-to-head wins in the future. Regarding our on-net customers, they receive pure 5G on the Boost Mobile network and have extended coverage through our network partnerships, with wireless coverage totaling 99% of the U.S. Today, we have over 1 million customers on-net and are loading more than 75% of compatible devices on our network in the accelerated rollout. As Hamid mentioned earlier, we are focused on activating a growing percentage of new customers directly onto our network as well as upgrading existing customers to Boost Mobile network-compatible devices. This will continue to be a key priority as we work to further leverage owner economics. For 2025, we plan to continue optimizing the Boost Mobile network, increasing our network's footprint based on consumer needs and in accordance with meeting our FCC milestones. Additionally, we look forward to working with the FCC to increase CBRS power levels, a key step towards improving spectral efficiency and increased utilization of this band, aligning the U.S. with the rest of the world. I'd like to turn it back to Hamid for a few short closing comments.
Thank you, John. Based on the momentum of 2024, we have a good starting point for the current year. EchoStar Corporation is positioned to deliver further operational improvements in 2025. We will continue to run our business with fiscal and operational discipline and focus on value creation by serving our customers with exceptional experiences. With that, we will open it for Q&A from the analysts' community. Operator, please give the instructions.
分析師問答
Thank you. It may be necessary to pick up the handset before pressing the star keys. One moment please for our first question. The first question today is from the line of Ric Prentiss with Raymond James. Please proceed with your question.
Hi. Good morning, everybody. A couple quick questions. Appreciate the details, particularly on the 5G network. You mentioned 23,000 sites on air heading to 24,000 by the June 14 deadline. Is there a number out there as far as what you want to hit by year-end 2026 extended deadlines?
Yeah. Hi, Ric. Thanks for the question. Just to correct one thing you said, it's 24,000 sites on air by June 14th of this year — that's what's required under the new FCC framework. For 2025, we're obviously focused on hitting the commitments that we've made. As we look to the future, we'll be back into construction mode; we have to put sites on air to hit our future deadlines. We're not really sharing numbers on exactly the number of sites we would have by year-end 2026. Some of that will be success-based. A good amount of the work that we're doing is driven by customer experience in the major markets where we operate, in addition to our FCC requirements. So we plan to value-steer our deployment capital towards the right outcomes based upon how the Boost Mobile business is doing at a market level. We'll try to provide some trail markers as we go, but we're not going to give concrete year-end site numbers at this time. Given the uncertainties around FCC commitments and the license timing, it's not a metric we'll look to over-share while we're executing and competing.
Okay. On the Boost Mobile side, speaking of which, it sounds like a lot of cross-selling then from the video side to the Boost side. Should we think of this kind of like what we've seen with cable operators as they try to bundle things together? And what kind of starting share of gross adds should we think Boost is targeting if I'm right about that bundling?
Ric, thanks for the question. We have just begun, honestly, just begun scratching the surface of what we can bundle. We are already cross-bundling our pay TV business with Hughes consumer connectivity business. That's something we have been doing through the year with very good results. We have integrated Sling service inside of the Boost Mobile app already. Early indications are that usage and adoption by customers are increasing. But I don't want to set an expectation that this is the whole growth plan for the year — it's part of what we're developing this year. I think you will see the results clearly as we go. We are uniquely positioned with several different assets that nobody else in our immediate industries has. We have satellite connectivity, great content experiences, and a great 5G and cloud-based network. We're just beginning to tie these things together. We talked about an example of direct-to-satellite. I think 2025 for us should be a year where some of these things become very tangible in terms of market offerings. Most of these things are under development. You're going to hear from us as the year goes on. Cable companies have been bundling broadband with content; we do a version of that with Hughes and DISH. As I said, that's just a couple of small examples. We expect a lot more to happen this year.
Great. Last one for me is to touch on that satellite connectivity. You led with the direct-to-device market, which has gotten a lot of excitement. How do you view that market and the uniqueness you bring to the table with the spectrum? Also, is this going to be a replacement for terrestrial, and could you expand on the direct-to-device opportunities? It's fairly crowded with many companies talking about it.
Yes. We believe we are very uniquely positioned. It really is not as crowded as it seems — it's crowded in announcements but not crowded in the reality of what's possible. I think only a few companies can possibly do this properly. First of all, we have been in service offering direct-to-device messaging in international markets for a couple of years, and we could easily do that in the United States. There's nothing special about the market that prevents it. We've been doing this commercially, so some companies are announcing novelty when we have been operating. We are working on the next generation of connectivity, which is far beyond messaging connectivity. We expect to have broadband connectivity, which will support voice, video — everything you have on a standard mobile phone — everywhere in the world. We have the important ITU rights and spectrum assets in the United States to offer that. That is probably the biggest endowment we have. But we also happen to be a company that is satellite-capable with long heritage as a global supplier to many satellite systems, including LEO systems such as OneWeb. Our experience, institutional knowledge, and technical capability in that space are unparalleled. Very few others have that. We also have a mobile system — I don't know anybody else that is both a satellite and a terrestrial mobile company. Tying the two together is equally challenging and important. In addition to ITU rights and spectrum ownership in the U.S., we don't see anyone else on the radar that has all of that in one hand. We are hard at work to make sure that becomes a reality. As I mentioned, we have experience providing messaging service to this market for the past couple of years, so it's not new to us. I hope that answers your question. It was a long answer, but you had a few angles you touched on.
Yep. Well, I appreciate it. Thanks, Hamid.
Our next question is from the line of Michael Rollins with Citi. Please proceed with your question.
Thanks, and good morning. You referenced earlier that wireless ARPU is growing. I'm curious if you could discuss some of the details — what you're seeing on intake ARPU versus what the average currently is to better appreciate where that may be going over time. Second, as you're looking at growth in the wireless business, can you expand on the pace of quarterly customer growth while also reducing the EBITDA burn at the same time? Or are you in a situation where you need to pay for these customers first — keep investing in the marketing engine — and then work on that EBITDA burn in future years?
So on ARPU, generally, we are lifting the quality of our customer base. The primary reason ARPU is rising is that customers are adopting higher-priced plans. We are moving up in terms of the price plans we sell and we are offering more bundled offers. That trend positions Boost at a more premium placement in the market, and every metric has improved — not just ARPU. We've improved churn and other operational metrics. We think that trend will continue. On OIBDA, any customer acquisition has an upfront investment of OIBDA and often CapEx. You pay that back over the customer's lifetime value. We are doing a better job than ever in value steering — looking at which price plans, which devices, and which geographies provide the best outcomes, whether it be upgrades or device offerings. We look at every angle to maximize customer lifetime value relative to acquisition spend. Bringing customers on-net further improves our economics. All of the metrics get even better as we bring customers on-net. A simple answer: OIBDA will usually decline when you have faster growth because of upfront investment, but you get paid for that investment over time. If I missed a nuance in your question, I'm happy to follow up.
No. That's helpful. If you're going to ramp customer acquisition significantly, you pay for that upfront and then you get the benefits over the customer lifetime. As you look at 2025, in terms of the exit rate of EBITDA burning in 2024, how do you balance those factors of increasing acquisition pace and paying for that relative to scaling the business over time?
At the moment, I won't give specific numbers, but we will focus on profitable acquisition. I would not pursue unprofitable acquisition. We don't have a shortage of cash right now; we are not limited in a way that prevents us from growing the business profitably. We are sitting on a significant amount of capital that I'd like to put to use. I would be happy to see a temporary decline in EBITDA if it represents a solid, profitable investment that yields returns over time. So long way of saying: our primary focus is growth — profitable growth. Spending EBITDA on profitable customer acquisition is a good thing.
Thanks. Our next question is from the line of Walter Piecyk with LightShed. Please proceed with your question.
Thanks. On the subscriber growth, gross adds being up 13.5% seems like a pretty major inflection. Service revenue grew sequentially. Ric was implying bundling, but did I miss something in the prepared comments? If not, why are customers suddenly signing up to the network? Also, are you planning on breaking out traditional prepaid versus what we'd consider postpaid? Can you give more color on what's happening in the business and how sustainable it will be going into 2025?
Our growth in subscribers is not from bundling. It's the result of a thousand actions we took last year to improve the customer experience and network experience of Boost Mobile, and we believe it's sustainable. Internally, we've said that there was not a single process at the beginning of 2024 that remained the same at the end of 2024. We brought the two brands together and redesigned nearly every workflow impacting customers — acquisition, activations, billing, customer care. Every metric has improved and customers are recognizing the fresh, high-quality experience. We made it much easier to adopt Boost. We are not characterizing this as a one-time effect. Regarding prepaid versus postpaid, over time the market has converged. The industry has focused too much on the distinction by payment form. Many industries finance customers and don't segregate customers by payment method. We want to serve all customers from one platform. For us, prepaid customers are incredibly profitable, and we are proud to be a leader in prepaid ARPU. Postpaid customers can be profitable too, but we evaluate every customer on a lifetime value and profitability basis. We are not going to break out postpaid versus prepaid because we think the industry ultimately is merging the two.
You're not going to break that out, and we're not going to get a sense of which part of the business is driving the growth more recently? Is it postpaid customers or traditional prepaid guys?
We're not going to break it out because we're intentionally merging the experience. If you look at many postpaid plans without device financing, they can have a shorter payback and similar economics to prepaid. The historical differences in pricing and churn between postpaid and prepaid have narrowed. We look at every customer on a profitability basis and are very happy with the progress made on customers acquired this year. We'll continue to focus on growth.
I'm on the network, but I'm not on the network because I got an alert to change my SIM. I'm a Boost customer. Can you give some sense of how many subs and how much traffic are on the network you built versus roaming partners, and how those roaming relationships play out? Where are you sending more traffic and how does that evolve over time? That's a cost component impacting cash.
Hey, Walt. Glad you're enjoying the experience. As I said in my opening remarks, we're over a million on-net today — so those customers are on our RAN enjoying their service. Our goal is, when you have a compatible device in one of our open markets, to put that customer onto our own 5G network. Roaming and MVNO partner relationships are also important and work differently; we use them to extend coverage and to support market launches, and they allow us broader access to RAN sites. One major differentiator is device compatibility — whether the device supports 5G SA and VoNR. A couple of years ago we had very few certified devices; today we have nearly all devices compatible with our network except one. The ecosystem has broadly supported us. We also have commitments around loading devices onto our network between now and June, and we intend to meet those commitments. We're pleased with the performance we're seeing.
Got it. Thank you.
Next question is from the line of Jonathan Chaplin with New Street Research. Please proceed with your question.
Thanks. I'm wondering if you can give a sense of how the enterprise and wholesale service revenue line is progressing. It's difficult to see that within the way you've reconstituted results. Where do you think that revenue line could be by the end of the year? And a housekeeping question for Paul — spectrum amortization: does it start when the spectrum goes into service or when you purchase the spectrum? Going back to direct-to-device comments for you, Hamid — do you need to use a LEO constellation to really do direct-to-device effectively, and if so, is that something you would do yourself or would you partner, and who would be ideal partners?
Thanks. Three quick questions: On enterprise, Hughes has a significant presence in the enterprise market and is among the leaders. We are the only satellite connectivity and telecom company in the Gartner leader box for Managed Network Services; none of our competitors are in that position. We are respected in the enterprise market and serve hundreds of brands and governments. We're beginning to use those relationships to put Boost and our 5G network into the enterprise space; you've seen examples such as Fort Bliss. Enterprise sales cycles are long, but customers last a long time. We are loaded with opportunities but cannot address every one instantly — enterprise is a cross-segment area with strong potential, but patience is required for sales cycles to realize revenue. On direct-to-device and spectrum, as I mentioned earlier, we've had a commercial direct-to-device messaging service internationally for a couple years. We could do that in the U.S. as well. The next stage is LEO-based broadband connectivity — LEO solutions provide low latency and the kind of experience where a consumer cannot tell the difference between a terrestrial connection and a satellite connection. We will not do everything entirely in-house; we have technology capabilities within Hughes and Boost and will bring critical technologies and institutional knowledge, but we'll also partner with manufacturers and technology companies to provide the best consumer experience. Paul, do you want to address the spectrum amortization question?
Sure. Just to level set: for book purposes, we do not amortize the spectrum, but for tax purposes we do. We start amortizing the spectrum upon purchase for tax purposes.
Got it. Thanks, guys.
Our next question is from the line of Bryan Kraft with Deutsche Bank. Please proceed with your question.
Hi. Good morning. With the financing transactions completed in the fall, can you talk about how much room the company now has to pursue wireless and the other growth opportunities in front of you like enterprise and direct-to-device, particularly given the capital needed for wireless subsidies and marketing and the maturity wall coming up in a couple of years? Are you still actively working to improve the balance sheet and extend maturities or even raise equity capital? Will we see any more positive developments on this front in 2025?
A number of good questions. First, we will continue to maximize market opportunities across multiple fronts and address financial and growth improvements. We're a large revenue company but in many ways a start-up and challenger, so we have to prioritize opportunities given capital and human resources. At the moment, I am not seeing opportunities we must forgo because we lack cash. We always look to increase liquidity over a longer horizon — that's an ongoing focus. We understand our upcoming obligations and intend to stay ahead of our needs. As we did in 2024, we'll continue to operate with fiscal discipline and a mindset of shareholder value creation. We'll be opportunistic with the levers we have available to increase liquidity and extend maturities when it makes sense.
Thank you, Hamid.
The next question is from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question.
Thanks. Good morning. Two questions: one for Paul Orban, and then I want to ask Paul Gaske about Starlink and satellite broadband. Paul, on the cash flow front, you said you delivered positive operating free cash flow in 2024 which was your guidance. Do you have a dollar number you can share to make sure we're looking at it the way you are as we think about 2025? You mentioned the $1.2 billion burn in 2024 and CapEx coming down this year; is it fair to assume that the total free cash burn should improve in 2025 versus 2024?
We don't give guidance on free cash flow or cash burn. What I will say is that we don't disclose the operating free cash flow dollar number, but it was better than our expectations to start the year and was a good number. Also, if you look at our disclosures, you'll see we have about a little more than $500 million more in interest payments in 2025 versus 2024, which will be a drag on free cash flow. We are pleased with the operational efficiencies that came to fruition last year.
Okay. Fair enough. One request from the sell-side and buy-side: if you're willing to provide a trending schedule with the new Wireless segment going back into the 2024 quarters, we'd all appreciate it.
Sure. Regarding Starlink, a clarification first: the direct-to-device T-Mobile/Starlink ad you referred to is a direct-to-device advertisement and not a fixed broadband ad. In the broadband space, Starlink has a large LEO fleet addressing many markets worldwide. For our Jupiter GEO service, we're focused primarily on customers who want a good video experience. Many consumers want to watch streaming video, and we've positioned our satellite solution as an economical satellite option for rural America where customers can get video services with interactive capability included. That positioning is a natural fit for us. Across broader markets, we look at ways to differentiate versus Starlink; we have LEO products and offerings as well and use them to provide different service parameters and SLAs for our customers. That differentiation will drive our long-term future in each market.
Thank you very much.
The next question is from the line of Tim Horan with Oppenheimer. Please proceed with your question.
Can you give any more real-world qualitative color on the advantages of the cloud-native network you're operating, and congratulations on the number-one network in New York. I also have a go-to-market question.
Thanks for the question. At a top level, our network looks a lot more like an IP system than a traditional wireless network. We're fully virtualized from the RAN to the core. That gives us tremendous flexibility in deploying new features and swapping out pieces. Traditional systems tend to be monolithic, sourced from one or two large suppliers. We have over thirty key partners in the network and continuously evaluate and change components. We also have an advanced software development lifecycle that allows us to deploy changes rapidly, similar to hyperscalers. One of the biggest advantages is access to a lot of data on network performance, which lets us identify where to invest next — it's like a 'moneyball' approach. That helps with CapEx decisions and provides an AI-ready platform. We're in a good position to quickly address advanced use cases and partner across an ecosystem.
That's really helpful. Sorry, did you say it's AI-ready?
Yes. I did say it's AI-ready. Ultimately, with a virtualized RAN and distributed edge compute, you can place accelerated processors at the edge if you want to support certain AI use cases. We have one of the larger distributed edge compute implementations, and being virtualized enables AI and advanced workloads more effectively.
Got it. On go-to-market, New York looks like you've done some hyper-localized targeted marketing. Can you talk about how cost-effective that is and whether that's the model you'll use nationwide?
It's too early to fully assess cost-effectiveness until we see take rates in New York, but we are pleased with initial results. New York is an incredibly important and efficient market for us given its scale and density, and our spectrum position is advantageous there. All indications are that the approach is promising. We will value-steer our spending — if local marketing efforts produce better results, we'll focus there. You'll hear more about this during the year, but local marketing is an important angle for us to focus spending where we see the best returns. Operator, we're at the top of the hour, so we'll take one more question.
Sure. The final question comes from Adam Rhodes with Octis. Please proceed with your question.
Hey, guys. Thanks for taking my question. With the FCC moving towards a re-auction of its AWS-3 spectrum inventory, how might you approach that option? I noticed in your 10-K that an appraisal of your AWS-3 and AWS-4 spectrum came in at $33 billion. Since this appraisal provides you with roughly $3 billion of additional first-lien spectrum-secured notes capacity, would you consider using that as a source to participate in the re-auction?
We support the FCC moving forward with the auction and we do plan on participating. AWS spectrum is very valuable today, far more valuable than in 2014. Device support is widespread and the spectrum is highly desirable. We expect the auction proceeds to be well above the $3.3 billion valuation in our view. That's also beneficial for the FCC and government. We feel good and bullish about the auction and plan to participate.
Okay. That's helpful. Any consideration for how you might use that additional capacity — would you look to finance based on that appraisal?
The capacity would certainly support aspirational growth. Our network is large, and additional spectrum would give us headroom to take market share and grow. On the financing side, Paul can provide more detail.
You're right; there's about $2.9 billion of additional capacity tied to the spectrum, which would be a first lien on that spectrum. We also have the ability to go up to 60% on a second lien, which would get us to about $10 billion of total capacity. We'll be opportunistic when it makes sense to use those levers. Right now, as Hamid pointed out, we are flush with cash, but when the auction comes up, we'll evaluate all options and we have multiple levers we can pull to finance participation if needed.
Great. Thanks a lot.
Thank you. This will conclude today's conference. Disconnect your lines at this time. Thank you for your participation. Have a wonderful day.
Thank you.
This will conclude today's conference. Disconnect your lines at this time. Thank you for your participation. Have a wonderful day.