MDA Hit Hard as EchoStar Cancels $1.8B Satellite Deal
Big news came out today in the space and telecom sector, and it’s hitting one Canadian company particularly hard. MDA Space, which many know as a major player in satellite technology, has just lost a massive contract with U.S.-based EchoStar. We’re talking about a deal valued at $1.8 billion—one that was originally announced back in August and had been celebrated as a huge win for MDA.
But this contract was suddenly cancelled after EchoStar made a major shift in strategy. The change was tied to spectrum allocation talks with the U.S. Federal Communications Commission. Instead of moving ahead with the planned satellite constellation, EchoStar decided to sell its AWS-4 and H-block spectrum licences to SpaceX. That sale is worth about $17 billion, and it hands SpaceX not just the spectrum, but also the ability to further expand its low-Earth orbit satellite network and even strengthen its cell phone service offerings.
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For MDA, the blow was immediate. Shares of the company plunged nearly 20 per cent in early trading on the Toronto Stock Exchange, landing around $35 per share. That drop erased much of the excitement that had built just weeks earlier, when the stock had jumped almost 18 per cent on the day the contract was first announced.
Now, it’s important to point out that MDA has emphasized the cancellation isn’t about their performance or their products. The company stressed that it had secured protections in the agreement and will be compensated for termination costs and fees. The exact amount hasn’t yet been disclosed, but CEO Mike Greenley reassured investors that MDA had anticipated possible risks, given EchoStar’s earlier financial challenges, and had built safeguards into the contract.
The cancelled contract would have involved building over 100 satellites for EchoStar’s 5G constellation, aimed at extending connectivity to remote regions. There had even been an option to double the order to more than 200 satellites, potentially raising the contract’s value to $3.5 billion. Losing that opportunity is clearly a setback, but MDA still points to a $4.6-billion pipeline of low-Earth orbit projects that remain in play.
The bigger picture here ties into the ongoing battle over spectrum in the U.S. EchoStar had been under pressure from regulators for not fully deploying its assets. SpaceX, meanwhile, had argued that EchoStar’s subsidiary, DISH, was underutilizing spectrum, accusing it of holding on to airwaves without meaningful deployment. The FCC even opened investigations and signaled that EchoStar risked losing its licences. That pressure, combined with direct lobbying from SpaceX and even a nudge from former President Donald Trump urging resolution, seems to have tipped the balance.
With EchoStar out of the satellite-building picture and SpaceX stepping in with spectrum rights, the competitive landscape just shifted again. For MDA, the short-term hit is sharp, but the long-term outlook will depend on how well it can capitalize on other constellation opportunities waiting in its pipeline.
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