Ladies and gentlemen, thank you for standing by, and welcome to EchoStar Earnings Conference Call for Third Quarter of 2019. [Operator Instructions] Please stay advised that today's conference is being recorded. .

And I would like to hand the call over to your speaker today, Mr. Terry Brown. Please go ahead. .

Thank you. Good morning, everybody. Welcome to our earnings call for the third quarter of 2019. I'm joined today by Mike Dugan, our CEO; Dave Rayner, COO and CFO; Pradman Kaul, President of Hughes; Anders Johnson, Chief Strategy Officer and President of EchoStar Satellite Services; and Dean Manson, General Counsel. .

As usual, we invite media to participate in a listen-only mode on the call and ask that you do not identify participants or their firms in your reports. We also do not allow audio recording, which we ask that you respect. .

Let me now turn this over to Dean for the safe harbor disclosure. .

Thanks, Terry.

All statements we make during this call, other than statements of historical fact, constitute forward-looking statements that involve known and unknown risks, uncertainties and other factors that could cause our actual results to be materially different from the historical results and from any future results expressed or implied by the forward-looking statements.

For a list of those factors and risks, please refer to our annual report on Form 10-K and quarterly report on Form 10-Q filed with the SEC. All cautionary statements we make during the call should be understood as being applicable to any forward-looking statements we make wherever they appear.

You should carefully consider the risks described in our reports and should not place any undue reliance on any forward-looking statements. We assume no responsibility for updating any forward-looking statements. .

I'll now turn the call over to Mike Dugan. .

Thank you very much, Dean. Good morning, everyone, and welcome to our earnings call. We certainly had an exciting few months. In September, we completed the spin-off to DISH of the BSS business and the ancillary assets and liabilities in exchange for DISH shares that were then distributed to EchoStar's shareholders.

In October, we announced the acquisition of Helios Wire Corporation, which holds global spectrum rights for S-band mobile satellite services. These transactions support our strategy of being a global connectivity provider for people, enterprise and things. The company continues to deliver solid financial results.

And as a management team, we continue to focus on operating the business in an efficient manner while balancing short and long-term opportunities. .

Let me now turn it over to Pradman, who will talk about the Hughes business organization. And then Anders will follow up with ESS and S-band EML status. Finally, Dave Rayner will provide the financial summary.

Pradman?.

Thank you, Mike. A few opening comments on our financial performance in the third quarter. Revenue was up 4% year-to-year despite relatively full beams on our Jupiter satellites. Our year-to-date orders have increased 54% from last year.

In the consumer Internet business, we ended Q3 with a total of approximately 1,437,000 Hughes net subscribers with net adds of approximately 22,000 in the quarter. Our international consumer base grew to approximately 192,000 subscribers. In Q3, we also announced the launch of our consumer service in Mexico, which began on October 1.

This new service, along with our services in 6 countries in Central and South America should continue to provide growth internationally..

Our Jupiter 3 satellite is under construction, and we are planning for launch in 2021. The satellite will add significant additional capacity as well as maintain the high-quality and competitiveness of our service in the unserved and underserved regions in North and South America.

It will leverage the latest satellite and systems technology to lower our cost per bit and enable us to meet our customers' increasing usage demand. .

In our international business, Hughes India was awarded an e-learning network for 500 schools in Northern India. Additionally, our Hughes India team was able to significantly expand the scope of their service agreements with the State Bank of India as well as the Punjab National Bank.

As the first operator in India to receive a Flight and Maritime Connectivity license, our Indian team now has launched Maritime Mobility Services and continues to explore multiple opportunities in the Europe front.

Our Hughes Europe business gained significant contract extensions with 2 clients, one is a large gas station operator and the other a large retailers, both with operations across Europe..

In Mexico, we are collaborating with telecom, a part of the Secretariat of Communications and Transportation to deploy Hughes Express Wi-Fi hotspots at up to 4,000 locations throughout the country. With this collaboration, Hughes Express Wi-Fi high-speed Internet service will complement telecom's rural telephony agents' existing service offerings..

In Colombia, we announced an additional partnership with Facebook to launch WiFi hotspots. Also, Axesat Networks has chosen to offer huge satellite services to enterprise customers throughout Colombia.

The Jupiter system continues to be the de facto standard for broadband operators around the world with additional well-regarded operators selecting the Jupiter system for their satellite broadband operations.

Optus is using the Jupiter system to deliver the next-generation of satellite services throughout Australia and New Zealand, delivering a range of services including 3G and 4G cellular backhaul, satellite news gathering and maritime.

Algérie Telecom has also selected the Jupiter system as they launched satellite Internet Services to citizens throughout Algeria. In addition, we have signed contracts for Jupiter systems with CIGNAL TV in the Philippines and Intersat in Kenya.

While still a small component of Hughes, our Defense business has experienced rapid growth this year through wins of Boeing on the next-generation DoD anti-jam satellite ground system. A contract with the U.S.

Army for management of its narrow-band satellite network and most recently, a contract with general atomics for an airborne satellite communications upgrade to the U.S. Army's [indiscernible] unmanned aerial vehicles fleet..

Our government enterprise group has recently been selected by the U.S. Postal Services to provide a VSAT network connecting postal service facilities across the United States and Puerto Rico. We expect to see continued order to revenue growth in these business segments going into 2020. .

We are making good progress on the completion of 2 previously announced joint ventures that will help us expand our business. The first is with Yahsat to expand our ability to provide Internet services and enterprise solutions in Brazil.

Yahsat will contribute to the satellite communications business and the Brazilian payload on Al Yah 3 for a 20% ownership in our existing Brazilian subsidiary. We expect this to be completed this year. The second is an agreement with Bharti Airtel in India.

This will help us bring greater scale, operational efficiency and market reach to provide Indian customers with broadband solutions for enterprise and government networks. Bharti will contribute its VSAT business to our existing Indian subsidiary for a 33% stake. Both JVs are subject to regulatory approvals which are pending.

Our work on the OneWeb network is continuing at full pace. We have shipped the first few gateways and the technical performance is excellent..

As you can see, we had another very strong quarter, and I'm looking forward to closing out another successful year and setting the stage for even greater achievements in the future. .

I'll now turn it over to Anders. .

Thanks, Pradman, and good morning. Third quarter ESS continuing operations revenue is $4 million compared to $7 million last year. The decline primarily being the result of lower satellite capacity lease revenues from third parties. Although the FSS environment remains difficult, we are actively exploring opportunities to lease our excess capacity.

On the S-band front, we announced in October our acquisition of Helios Wire, a satellite-enabled IoT connectivity company headquartered in Canada for a total consideration of approximately $26 million. The acquisition of Helios -- Helios' Australian subsidiary, Sirion Global, which holds global spectrum rights for S-band mobile satellite services.

We've additionally contracted for the construction and launch of our first flight of LEO satellites at a cost of less than $10 million.

We acquired these companies through our subsidiary EchoStar Global through which we intend to develop S-band platforms that we expect will reduce the cost of satellite-delivered IoT services, including machine-to-machine communications, public protection and disaster relief and other end-to-end services..

We also continue to make good progress with EchoStar Mobile. We are in discussions with several new distribution partners, and we continue to see a lot of enthusiasm for our new terminal road map. Our new Hughes 4500 omni-directional terminal is officially launching at European Utility Week later this month.

We also have a hybrid NFS terrestrial version of the 4500 terminal in the works that should be available mid-2020, and we are pushing forward with our plans to develop new technologies that will enable us to deliver devices that will generally increase the potential addressable market for global satellite delivered M2M and IoT services. .

Finally, our long-term strategic goal remains to fully integrate the S-band satellite services into 5G networks and we also continue to explore ways to integrate our complementary ground component authorizations into these and other developments. .

I'll now turn it over to Dave. .

Thank you, Anders. As Mike mentioned, on September 10, we completed the spin-off of BSS Business to DISH. As a result, the BSS business, excluding the real estate that was included in the transaction, has been presented as discontinued operations in our current financial results.

Discontinued operations' disclosure is subject to very specific GAAP rules. And as a result, the financial results of the impacted operations are disclosed in a single-line net of tax on our P&L. We also present EPS for both continuing and discontinued operations. The prior year numbers are presented in the same way.

We have provided a summary of historical continuing operation results on our website and as an exhibit to our 10-Q..

Like last year, I will be speaking to our adjusted EBITDA measurement. The measurement excludes from the EBITDA certain nonrecurring items as well as gains and losses on our investments and unrealized gains and losses on foreign exchange. More details are in the GAAP to non-GAAP reconciliation in our earnings release.

We believe that adjusted EBITDA more closely represents our operating efficiency and financial performance. .

Before I get into the financial results, I'd like to address the charge we booked in our Hughes segment during the third quarter related to a license fee dispute with the Government of India. The accrual of $21 million impacted our general and administrative expense by $7 million and interest expense, net of capitalized, by $14 million.

There was a corresponding offset in net income attributable to noncontrolling interest of $3 million.

This fee dispute dates back over a decade, where the Indian Department of Telecommunications has contended that non-core revenue should be included in the revenue base of Indian telecom companies on which levies are charged under a revenue-sharing system of license fees.

The Supreme Court of India ruled recently in favor of the Department of Telecom, finding that telecom companies must pay many years of charges plus penalties in interest. The entire Indian telecom industry is affected by this ruling in an aggregate amount reported to exceed $13 billion.

As a result, the government has set up a cabinet-level committee to examine how to alleviate the impact of this ruling and other economic factors. We expect that action by the Department of Telecommunications to enforce the Supreme Court ruling will await the outcome of this committee's work..

Now to the financial results. Consolidated revenue in the third quarter was $472 million, a growth of 4% over the same period last year, driven by growth in our Hughes segment, offset partially by lower ESS revenue. Consolidated adjusted EBITDA in the third quarter was $148 million compared to $154 million last year.

Without the Indian fee dispute, adjusted EBITDA would have been $152 million during the quarter..

Our net loss from continuing operations was $23 million in Q3, the loss increasing by $20 million from last year. This change was primarily the result of higher unrealized losses on foreign currency, higher depreciation expense and increased equity losses of unconsolidated affiliates, partially offset by higher gains on investments.

Net interest expense, which was relatively flat year-over-year, was impacted by $14 million from the Indian fee dispute, which offset savings associated primarily with the retirement of our senior secured notes in June. Capital expenditures in the quarter were $95 million compared to $167 million in Q3 last year.

The decrease was primarily due to lower spend on construction and infrastructure associated with the satellites and lower CPE associated with our consumer business. Free cash flow, defined as adjusted EBITDA minus CapEx, was $53 million during the quarter..

Turning to the segments. Hughes revenue was -- in Q3 was $464 million, a 4% increase year-over-year driven primarily by growth in Hughes consumer service and enterprise and mobile set hardware sales, offset partially by enterprise services.

Hughes' adjusted EBITDA in Q3 was $169 million, a 1% increase over Q3 last year, primarily from the higher revenue noted above and partially offset by higher marketing and promotional costs associated with our consumer business, higher net G&A expense associated with the government of India fee dispute and losses on equity on unconsolidated [ attendees ].

.

ESS revenue in Q3 was $4 million, down $3 million from the last year, primarily due to lower satellite capacity lease revenue associated with third parties. Adjusted EBITDA was $2 million in Q3 compared to $5 million last year, primarily due to the lower revenue.

Adjusted EBITDA in the Corporate and Other segment in Q3 was a loss of $23 million compared to a loss of $18 million in Q3 last year, the change being primarily driven by higher G&A expenses associated with strategic transactions and higher losses in equity and earnings of affiliates. .

We ended the quarter with $2.5 billion of cash and marketable securities and negative net debt of approximately $158 million. We are continuing to assess our capital structure and evaluate opportunities to foster both organic and inorganic growth. .

With that, let me turn it back over to Mike. .

Thank you, Dave, Pradman and Anders. As you have heard from our executive team, it was a very productive quarter. I'm very proud to be a part of this executive team and all of our recent accomplishments.

Our focus continues to be a global player providing bandwidth, networks, support infrastructure and secure services across a wide spectrum of opportunities. .

Let me now turn it over to the operator, so we can start our question-and-answer session. .

[ Operator Instructions]. Your first question comes from the line of Ric Prentiss from Raymond James. .

A couple of questions. One, just to make sure I understand the India fee. First, is this the full fee? I know it's being looked at, trying to see if the government can do something with it.

But does this represent the full amount, both the G&A and the interest expense, based on the current price, or would there be a future adjustment as well?.

Right now, we have accrued the full amount. We had a slight amount accrued actually for many, many years. But the additional charges that we booked this quarter are for the total amount. There's a possibility that interest could grow over time. And so we'll assess that on a quarter-by-quarter basis.

Depending on how things progress with the Indian government and how they're going to deal with this. .

Okay.

And then you mentioned how there was the $7 million at Hughes, but was the $3 million for the offset also at Hughes? I guess, a better way of asking the question is the $169 million of EBITDA that was reported at Hughes, should we consider that would have been $4 million higher or $7 million higher at Hughes without the India item?.

It would have been $4 million higher. So there's $7 million plus the $14 million of interest and then the minority interest component of that is about $3 million. .

Right.

But the EBITDA would have only been affected by the $7 million and the negative [$4 million the $14 million ]?.

Correct. .

Right.

But both items, the $7 million and the minus $4 million -- sorry, minus $3 million are -- those are within Hughes?.

Those are -- yes, this entire thing is within Hughes. The Indian subsidiaries are all Hughes subsidiaries. .

Okay. And then you mentioned, Anders, mentioned the Helios transaction, $26 million total consideration, and that construction for LEO is less than $10 million. I know we get a lot of questions from investors trying to focus on your capital expenditures and your outlook for capital expenditures.

How should we think about the total cost of Jupiter 3 that you've already spent, and that's remaining to be spent but then other kind of projects that are out there versus what might be -- maybe more of a normal ongoing CapEx. .

I mean, certainly -- and Anders can address plans around the S-band strategy. But we do have still several hundred million dollars left to spend on Jupiter. And that's the only major capital expenditure item that we currently are committed to.

We obviously still have ongoing CapEx for CBE, which at this point in time is principally in South America, where we continue to grow the consumer business. There's capital associated with certain enterprise projects which are all driven by contracted revenue. So success-based CapEx.

And then, as I said in my comments, we're going to continue to assess the use of our capital or the cash on the balance sheet and look for ways to grow organically and possibly inorganically. But right now, I mean, we don't have huge commitments outside of Jupiter 3. .

And Jupiter 3 was a 2021 launch.

Should be mostly spent, I would guess, by the time you're mid through 2020?.

Yes. To a great extent. I mean, obviously, there's some backload of CapEx on that. And certainly, the launch cost starts coming in there. .

Okay.

And then, Anders, can you update us a little bit on the S-band and what Helios brings to the table and the LEO construction?.

Well, Helios, or more accurately Sirion, is another piece of the mosaic I think between SATS, S-band, GEO network and our affiliate DISH networks, S-band networks over North America. We already hold sort of positions of priority and have established businesses.

What Sirion brings to the table is the ability to fill in the gaps to provide what could be -- is a global solution in the band. So our initial focus will be to bring their filings into Hughes with this first flight of nano-Sats and then assess our strategy going forward, depending upon the opportunity. .

So we are in discussions with a number of potential customers about putting together a network, which would present global coverage. And depending upon the pace of those discussions and the levels of commitment that will regulate sort of our willingness to move forward with a plan to more fully populate the network. .

Your next question comes from Michael Rollins from Citi. .

Two questions, if I could. First, following the new structure for the company post the transaction with DISH, can you describe strategically and operationally, where your paths may cross again with DISH, whether it's investing together, pursuing things like IoT. Just a sense of how to think about that relationship on a go-forward basis.

And then second, as you look at the opportunity for S-band more globally, are there significant investments that need to take place to execute upon that vision?.

Okay. This is Mike. I'll take the first question. First of all, with the BSS transaction, we really are highly independent. We don't fly any of DISH's satellites anymore, all of the associated technology has been transferred back to DISH.

They are a vendor of ours now, which is they are flying our Jupiter satellites and they will continue to support us in the future from an operational standpoint. I believe you'll cost -- you'll see us certainly be -- continue to look at S-band partnerships, as Anders alluded to.

We hope to be a big vendor of theirs as we move forward, as they build out networks and they attack certain segments. We think news EchoStar will continue to be a preferred vendor in areas that we do a great job.

And I think we -- with this transaction, it gives us certainly some independence that will help us look at other opportunities and be viewed more independent.

So as for the second question, I'll let that up to Anders?.

Well, as far as obligations going forward, the Sirion filing, which is through the Australian administration was modified slightly earlier this year, and we will have an obligation to bring that filing into use prior to April of 2021. And we've already embarked and are well down the road on a plan to perform that task.

So we will be standing up a network and conducting tests across the network probably by late 2020 and certainly by the first quarter of 2021. .

We also have Chris Quilty from Quilty Analytics. .

I just wanted to follow-up with a question on the consumer part of the business, and maybe this is technical in terms of how you're addressing net adds when you're dealing with a lot of these international opportunities that are done through Wi-Fi hotspots or group call centers and those types of applications?.

I'm not sure I understand your question. If you're asking are we counting the Wi-Fi hotspots in our consumer subscriber account, the answer at this point is no. We've had some conversations as that part of the business grows, that maybe we should do some sort of an equivalent calculation.

But at this point in time, the subscribers that we report are individual consumer and -- as well as small and medium enterprise customers.

If your question was something other than that, Chris, can you restate it?.

No, that was it. I just -- one of the concepts you've been promoting are these locations where you have people that can come in and use the Wi-Fi on a part-time basis, and it has more of an enterprise flavor to it than an individual consumer.

And how you would account for that, either falling into the enterprise bucket or does it fall into the consumer bucket?.

I think from a revenue standpoint, we will count it as consumer revenue. It's indirect consumer, but it's still consumer, but as I said, it's not currently in our subscriber count, but it is in the subscriber revenue or the consumer revenue or services revenue. .

Understand. And it looks like just the equipment revenues were up fairly strongly this quarter, I think, around 15% or 16%. And obviously, CPE has been soft with the lower gross adds.

Can you give us a sense of where the growth is coming on the equipment side?.

Yes. I think we had significantly increased revenues in the enterprise sector. OneWeb had a good quarter and will continue as we start delivering production gateways. So we'll continue to see revenue growth in that sector.

We've also been, as I mentioned in my earlier comments, that we are selling Jupiter platforms all over the world, which again shows up as hardware revenues in our enterprise sector. So that pretty much accounts for all the increases there. .

Understand. Pradman, so the Jupiter system as implemented in the U.S. is KA-based but obviously for a lot of these places internationally where you've sold Jupiter, there is no KA capacity.

Can you talk about those infrastructure sales are obviously KU-based, but how does that platform migrate if and when KA capacity does become available in those areas?.

Yes, that's fairly straightforward. If you look at the total system's capability in the Jupiter platform, most of it is independent of the RF frequency that you use. So right at the end -- at the edge of the --, intermediate frequency, IF frequency, we either convert to KU or KA depending on the requirement of that particular customer.

But all the processing, all the software and all the interfaces, with the terrestrial networks, is all independent of what RF frequency we use -- which satellite we use in the network. .

Understand. And a similar technical question on S-band, you have rights in Europe and DISH in the U.S. for S-band, GEO -- the Helios Wire filing is for LEO.

Can you explain how those frequencies can be integrated? And are they cojoined in terms of where they're located on the S-band portion of the spectrum?.

Well, they are the same frequencies. So the frequencies are authorized with the ITU for both geostationary and non-geostationary systems, and that's where this was quite complementary.

And between our existing filings, which broadly -- considering the DISH holdings in the band and then SATS holdings in the band, which are through multiple administrations.

Adding this Australian filing to the portfolio gives us the opportunity to build out a network in the S-bands across pretty much the full allocated spectrum other than within Europe, a piece which is allocated to Inmarsat.

And once again, S-band is authorized at the ITU level, there's still a country-by-country exercise that needs to be undertaken, both with regards to how the S-band is authorized in each country and then obviously, gaining access to that country or being licensed by it for deployment of the spectrum in a particular country. .

Got it. And for the deployment of those services, is that done, again, using the EML subsidiary will lead that cause and second part of the question, I'm assuming that the LEO satellites that you mentioned were a satellite that were previously ordered by Helios Wire.

Do you have some sort of a strategy around building out a larger constellation in LEO or deploying a hybrid LEO-GEO?.

Well, if I could answer your first question, as I mentioned in my script, we've formed a new company called EchoStar Global, which will probably be the entity through which we develop the capabilities of this new network.

How that integrates with EchoStar Mobile, who obviously has a head start in developing Geo-based services within the European Union and the surrounding area. How we meld those together or use our existing assets for further development across this new NGSO platform has yet to be decided. .

We're looking at the network as an integrated network. So many of the devices that we're contemplating developing or are indeed developing will look indifferently at either a GEO asset in the band or an NGSO asset in the band.

And that's the whole point, is we have the opportunity here to create a networking capability with a lot more bandwidth than available by the existing global networks that currently exist. .

As far as the satellites themselves. We had been in discussion with the former owners of Helios Wire for quite some time. And the transaction itself had multiple phases. And as we moved through the phases, we undertook discussions with the vendor which we selected to construct and will launch next year the satellites which we have designed.

So they were not previously under contract by Helios Wire or Sirion. Those are purely an EchoStar procurement. .

[Operator Instructions] We have a follow-up question from Ric Prentiss, Raymond James. .

I just want to follow-up on one of Chris' questions. Anders, you mentioned to be able to use the full spectrum in the S-band. Is that still -- I'm trying remember, the uplink and downlinks maybe like 45 megahertz up and 30 megahertz down. I'm just trying to scale it for how many megahertz are in that band.

And then remind people that we're just kind of talking in the 2 gig range, I think, right?.

Yes. So it's all referred to as 2 gigahertz, and you had it correct, it's 40 and change in the aggregate up and 30 down. There are 3 ITU regions and the band is characterized slightly different across the different regions. But broadly speaking, those are the metrics. .

And where does that frequency stand as far as getting foot into an ecosystem as far as into infrastructure or devices? Obviously, you guys have been working on that.

But kind of where are we in the baseball game of getting that spectrum maybe put into infra-end devices?.

Well, those are conversations that have been running for quite some time. Certainly, our acquisition of EchoStar Mobile back at the end of 2013, we then started having conversations with vendors about getting the band incorporated into a more widely distributed devices, we've also developed a number of devices ourselves.

But the physical attributes to the band are quite attractive, and they utilize an omnidirectional antenna which eliminates the pointing concern and allows for a very small antenna and a low-power transceiver to close the link. So the applications set here, especially as 5G rolls out, is a large opportunity for us. .

And obviously, it's a different band than the C-band, but a lot of discussion in the U.S. about how much C-band is worth in more like 4 gig range, we bought wider bands, but you guys have got a lower frequency with a lot of frequency as well. So I'm just trying to think through as we try and put that into some monetization efforts.

So some interesting spectrum here. .

We think so. .

And we also have a question from Chris [indiscernible]. .

Just a couple quick questions relating to S-band. It was reported that you bought rights in Mexico for approximately $150 million. So if I kind of put together all the investments you all have done in the S-band, I get $500 million to $600 million.

When we think about the related infrastructure spend, can you kind of comment on that directionally, the way you're thinking, number one? And then second question, when you talk about equipment or ground station equipment being compatible with LEO and GEO, do you also anticipate the equipment is compatible with ground -- complementary ground use cases as well, in terms of leveraging the terrestrial part? Or is that an entirely different kind of business approach down the road?.

Okay. Well, to try and take your questions sequentially. As far as Mexico, we are currently a MSS licensee in Mexico and recently participated in a proceeding that Mexican authorities held regarding the auctioning of ancillary terrestrial rights to those very same frequencies. And that is the activity, I believe, you were referring to.

So we are currently an MSS licensee in Mexico and also a mobile -- terrestrial mobile licensee for the same frequencies in Mexico. But our investment in that license in the auction was nowhere near the magnitude of what you've referred to. It was single-digit millions, I believe. .

Yes, I think what the number you're referring to as a $150 million was MXN 150 million. .

Yes.

In so far as the ultimate development of this band, the Helios Wire acquisition gives us sort of a -- now a full coverage from an MSS standpoint, how that MSS authorization may be licensed in the future for complementary terrestrial use is certainly something that is an opportunity for us, but it's not the focus of either the acquisition or our current ambitions.

I think right now, it's more the opportunity to develop what would be the satellite-based network utilizing both GEO and non-GEO assets to create a global footprint across which multiple devices, whether fixed or mobile, can gain access. .

And just as a follow-up to that question.

In terms of the S-band in North America owned by your partner, is the thought there that, that could be part of some slice operation where you could gain access to a slice of that network for any kind of worldwide IoT ambitions?.

That is certainly within the scope of our discussions. .

We also have a question from Chris Quilty from Quilty Analytics. .

Just wanted to clarify, from earlier in the conference call, you have not yet completed the Yahsat JV for Brazil, is that correct?.

That is correct. .

So we hope you complete it before the end of the year. .

Great.

And so have you mentioned previously, how many subs Al Yah 3 gives you access to in the Brazilian market? And are you currently constrained at all with your existing capacity?.

Well, some of the hot beams around Sao Paulo and Rio are filling up just like the hot beams in the United States that are filling up. And obviously, Al Yah 3 brings the additional Space segment for us in Brazil and will alleviate this congestion in some of the hot beams.

So from that perspective, in addition, Al Yah 3 also cover some parts of Brazil that our existing payloads didn't cover. So we've been able to address markets in those areas. .

And have you given the sort of order of magnitude number of subs you expect to add?.

No, we have [indiscernible]. .

I don't think we've done that yet. .

Do you want to?.

Eventually. .

We also have Kyle Davis from [indiscernible]. .

I have 2 questions. The first is I was just wondering if you could comment on whether you think this pace of net adds is sustainable for the next few quarters or so. And then my second question was just, is there anything to report positive or negative in terms of the ARPU environment in the U.S. relative to previous quarters. .

Well, taking your second question, we have seen our ARPU in the United States go up slowly but it's definitely going in the right direction. So I don't think we actually put out the numbers, but the trend is in the positive direction. In terms of sustaining the net adds, I don't think we give out those kind of guidance, right? At this stage.

And so I'd have to pass on that. .

I think the trends that you've seen in terms of the net adds will continue with at least in the near-term until we have the Jupiter 3 capacity back in the U.S. that the U.S. net adds will be relatively flat, or I should say, the total subs will be flat, maybe tick up a little bit, but not much growth in the U.S.

and the growth that we will show will be coming from the international markets. .

No further questions at this time. Presenters, you may proceed. .

We're now ready to conclude the call. So thank you, everybody, for calling in, and have a great day. .

Ladies and gentlemen, that concludes today's conference. Thank you for joining. You may now disconnect..