AT&T to Buy EchoStar Spectrum Licenses for About $23 Billion

0:00Sam Fazeli:When your options are limited, so are your opportunities. At Cibo, the global exchange that pioneered options trading, we offer more ways to move with the market. From VIX and SPX options to global market data solutions, Cibo helps investors diversify, manage risk, and stay ahead of whatever the market does next. Cibo. Life is better with options. Your investments could be too. There are risks associated with SIBO Company products. Review the disclosures and disclaimers at SIBO.com slash US underscore disclaimers. Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, the thrill of closing a deal.

0:38Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. Until now, the data your AI depends on has been trapped behind ever-increasing cloud fees. Wasabi created hot cloud storage and is redefining cloud storage for the AI era, delivering simple, predictable cloud storage for AI, analytics, media, and more.

1:14Your data is free to move, fast to access, and ready when your AI needs it. Hidden fees add up fast as AI workloads grow. Wasabi's flat pricing eliminates all of it. One rate, no surprises. Learn more and try now for free at wasabi.com. Wasabi, the AI storage cloud. Proud partner of the iHeart Podcast Network.

1:34Bloomberg Audio Studios. Podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Okay, so we have some big news. EchoStar, it's agreed to sell Spectrum licenses to AT &T for about$23 billion. I'm looking at EchoStar shares right now. They're up 77%. So we wanted to talk about this, right? So our producers are scrambling. It's a mad dash. Who are we going to get? We're going to pull in someone who's hanging in Nantucket.

2:15That's right. It's John Butler, Bloomberg Intelligence Senior Telecom Analyst. John, we really appreciate you taking the time for us. Good morning, guys. How are you? Good morning. Yes, we pull in the big guns. So explain to us right off the bat, what does this deal mean? So obviously, given the price action, it is huge for Echo Star. And I think at issue for them is they have they've been trying to build their own 5G network to compete with the big guys. And they have the spectrum to do it, but they didn't have the capital to do it. They really have an outsized debt load that they've really been struggling to service.

2:54And the FCC intervened here and they've been pressuring the head of Echo Star, Charlie Ergen, to either use the spectrum and start to fill those airwaves or to sell it. And so I think this is maybe the first of maybe even more moves to sell more spectrum on the part of the company. But given the price tag, it alleviates that capital crunch. And so any risk of default here, I think, is minimized now in the wake of this deal. And so investors are breathing a big sigh of relief. Talk to me a little bit, John, about this price,$23 billion,$9 billion more than EchoStar paid for the spectrum,$5 billion more than the appraised value.

3:46Is AT &T getting value out of this$23 billion deal, or are they grossly overpaying? So I'll say Spectrum is like houses on Nantucket. The price just continues to go up over the years, particularly with the advent of AI now and the need for more capacity to carry that added traffic. It's really not a concern on my part as to whether or not AT &T is going to get a good return on this investment. And again, all kidding aside, I go back to that analogy that really spectrum tends to increase in value over time. It's a very illiquid market, so it's hard to really get a good feel for their fair value of different frequencies.

4:37But I have no doubt that at the end of the day, even expensive is going to prove cheap here for them. Hey, John, can you dig a little bit into how this is going to expand AT &T's network? So if you look at the spectrum holdings of Verizon, T-Mobile, and AT &T, and spectrum, I'll just take a step back for listeners that don't know. When you're making a call or transmitting data over the air, you're doing it using spectrum. And the more you have, think of it like the width of a pipe, the more you have the fatter the pipe, the faster the download speeds. And so AT &T intends to put this spectrum to use almost immediately to really enhance the download speeds of the network.

5:23And so network quality gets better. Word gets around. People begin to say AT &T has a better network. So from a branding standpoint, there's a real benefit here. And then longer term, again, as AI continues to scale up and inferencing those queries that we make and the answers we get back, a lot of that's going to be done at the edge of the network where you need that big fat pipe to support that traffic. So I think in their minds, those are the two things thereafter, improving the network quality and the brand image and having the pipes to move the traffic that's coming down the road here. And John, yesterday on a call with investors, AT &T's CEO, Stanky, said that regulators shouldn't be concerned that this transaction was going to put too much wireless spectrum, I guess, in the hands of one of the largest telecom carriers.

6:20That's what he told investors. But do you think regulators are going to balk at this? No, I think regulators have been behind prompting the sale, if that's the right way to put it. So again, the FCC was really on EchoStar to sell some of that spectrum. They're educated and well-educated in wireless as regulators to know that it was probably going to be one of the big guys that would step up and buy it. if I look at AT &T Spectrum holdings, they had a competitive disadvantage or less holdings in the band or the frequencies that they purchased from EchoStar here. So I don't think there's any sort of regulatory argument against the deal here, but I would defer to our legislative analysts in Washington to really make the call there, but I'm not concerned.

7:20Stay with us for more Bloomberg Intelligence, coming up after this.

7:50Sam Fazeli:Review the disclosures and disclaimers at sebo.com slash US underscore disclaimers. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening, as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Wan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares.

8:27Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seed inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time. The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode, available on Plus and Pro Plans.

9:10Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, The thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. You're listening to the Bloomberg Intelligence Podcast.

9:46Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. So a lot of headlines in the news. One of them that caught my eye, this was Eli Lilly. OK, so their weight loss pill, it's moving a little bit closer, one step closer to this potential approval. This came after results from its latest trial. So what we want to do is get more details from that. Let's bring in Sam Fazelli. He is Bloomberg Intelligence Director of Research for Global Industries and Senior Pharmaceuticals.

10:19Joining us from London, Sam, welcome back to the show. So this is the second trial of the pill, I believe. So how is it different this time around?

10:27Sam Fazeli:It is, Lisa, and thank you for having me back. And I'm sorry that Paul isn't here for me to give him grief because he always tells me off for taking days off. I know, he always busts your chops. Next time. And so, look, this is a large trial in diabetic patients, but obese diabetic patients. So they're looking at the impact in that population. That population tends to have less of a weight loss for a variety of reasons, but it's come out exactly where we thought it would come out. Actually, maybe a little bit better than people's lowered expectations after that first trial I'll read out a couple of weeks ago, if you remember, when the stock got hit severely, Lily's stock.

11:13Sam Fazeli:And so we're seeing about 10 % weight loss and still the same high levels of discontinuations. This is a long trial. So you even find a whole bunch of people on placebo discontinue because they get bored. They want to go and get weight loss from another drug. So it's actually pretty decent data. And I think you can see that NOVA sold off on the back of this because it's a small molecule pill. It's a pill you can take, relatively easily manufactured, and you can take without too much complications in terms of don't eat, do eat, take it in the morning, take it in the evening, that sort of stuff.

11:48And that's the key, Sam. And I'm wondering how much of a game changer this is because it's not an injection, right? It's a pill. You're looking at an industry that by 2030 is projected to be$95 billion. So if this goes Eli Lilly's way, is it a game changer for the company?

12:06Sam Fazeli:Yeah, I mean, it has gone their way. This is, unless something shows up in the enormous number of files that they file to the FDA in terms of side effects or something, this is a drug that's likely to get approved. The question is, how do you use it? You've got the injectables once a week, once a week, not a big ask, very fine needle. People even tell me they don't even notice the needle going in and out, but still, you don't see the needle. So what does it sit? 10 % weight loss versus 20-odd percent weight loss. So what is the right way forward here? Some people are needle phobic. It's going to be helpful for those.

12:43Sam Fazeli:Some people can't get access to the drug because it's hard to manufacture the other ones that are injectables, sterile manufacturing. So there's lots of room for this. And, of course, there's this other thing that I think a lot of people keep thinking about is you've got your big weight loss with your injectables. Six months in, nine months in, 12 months in, switch to this and help you maintain. You might not even need the higher doses, which are causing some side effects. Maybe you can get away with a lower dose and maintain that weight loss. They would have to do a trial to prove that, though.

13:15So, Sam, as you're talking, a question kind of popped into my head. You're talking about all the different advantages to it. What about, has there been any talk about price? Like, how much could this pill cost compared to an injection?

13:28Sam Fazeli:I mean, it would be an error for these companies to start competing with themselves on price with their products. If you find that actually you can go with the lower dose of this, your margins are a bit better, definitely because there's no device involved. But I don't know what the small molecule manufacturing, because not all small molecules are easy to make, right? and it may be a small discount perhaps i don't know but but i doubt that this will come out at a level that's significantly lower um on the other hand it does have lower weight loss so maybe maybe there is an opportunity to kind of i said pari passu if whatever if that's the right phrase in line with its weight loss that you're getting i want to uh branch out and talk just biotech on a bigger scale for a moment, because M &A has been pretty active in the sector.

14:22We had Merck buying Verona Pharma, I think it was for their respiratory treatment recently. What's the outlook for M &A there? And I know one of the hurdles for biotech, and it's sort of an ongoing hurdle, is changes to regulatory framework. So talk to us a little bit about that.

14:36Sam Fazeli:Yeah, those changes, if you're talking about perhaps from an FTC perspective, those have not hindered M &A deals. We counted a whole bunch of deals in the first half of this year, and it looked like a pretty strong year for deals, and that's not even including the Verona one. The thing here is a lot of executives in the biotech world are still looking at their share price charts, thinking back to those beautiful days of two or three years ago where the share prices were 70, 80 percent higher. Right. And thinking, is it the right thing for them to do to sell? Clearly, some have got to the point of accepting that, and some have done it from a position of strength.

15:18Sam Fazeli:Verona was rocketing up before they got taken out at whatever, over$100 a share. So pharma is definitely interested. Maybe if the interest rate environment, going back to what we were just hearing earlier, does go in favor of cost of capital coming down, maybe you'll start seeing some more deals. And of course, that would also help biotech valuations potentially in general. So maybe there would be an interesting time to look out to in the next six to 12 months. All right, Sam, in the last minute or two you have here, another article caught my eye. President Trump Health and Human Services Secretary Robert Kennedy Jr.

15:51There are less than plenty to ban the COVID vaccine within months. Did this surprise you at all?

15:59Sam Fazeli:Well, yes, no. I mean, both. The thing is, it's a rumor. And I think HHS has said, look, there's nothing that we can tell you today that would back this. I think that would be a mistake. and choice is what Americans have always valued in the freedom that the U.S. has. Let's just leave the choice there. Give people all the information. Do the scientific work that the HHS wants to do and just leave it open and give it to the discussion between physicians and patients and subjects and people. I think that's the right way, whether that will happen or not. But if it does happen, we've got a bad time for BioNTech and Moderna because that's their only source of revenue.

16:41Stay with us for more Bloomberg Intelligence. Coming up after this. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time. helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares.

17:19Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seed inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time. The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode, available on Plus and Pro Plans.

18:01Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, The thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. Your social media feed delivers plenty of advice, but it doesn't know you.

18:37It doesn't ask questions. It doesn't give physical exams or order tests. Doctors do. At the American Medical Association, we believe the best care starts with a real conversation with someone who understands the science and your unique health. So stay curious, ask questions, but when it's time to make decisions, make them with a doctor. Learn more at amahealthvshype.org. That's amahealthvshype.org. you're listening to the bloomberg intelligence podcast catch us live weekdays at 10 a.m eastern on apple carplay and android auto with the bloomberg business app listen on demand wherever you get your podcasts or watch us live on youtube what's also peace of america are eyewear right you go out and it's like you're styling you're wearing your fancy sunglasses it's a nice day out you know You have to look good when you're going out.

19:30So this is taking us to the competitive eyewear space. We're saying, sources are saying that the maker of Ray-Ban sunglasses, I have my own pair, Essilor Luxottica, they're considering increasing their stake in Nikon. Now, the company has really been pushing ahead with the smart glasses initiative. So we want to find out more about it, right? So let's go to Diana Gomez. She is Bloomberg Intelligence Senior Equity Research Analyst. Diana, thanks for joining us. So how much they want to boost their stake in Nikon and what's the current holding at? Hi.

20:03Sam Fazeli:Yes, thank you for having me. So at the moment, it's about a 9 % stake. And the reports we are getting is that there is a potential interest to increase that to about 20%, which would be in the order of working at current market cap, maybe$300 million or so, which given SEL Luxottica's cash position would not be quite material, but still quite a sizable stake in Nikon from a few years of quite a long experience in their joint venture. Connect the dots for us, though, because what does Nikon have that Luxottica wants? Besides the brand name that is quite well known to even the consumer side outside the professional sector, there is the technology and the know-how that can be utilized and leveraged by both companies.

21:07Sam Fazeli:So we are talking about the distribution of Essilor combined with know-how and a strong or brand name of a company like Nikon and they have been partnering in different areas. One of them, which is quite an emerging one, is the myopia control, which are these lenses that are meant to swallow the progression of myopia in children, which is quite important given that forecasts are that by 2050 about half of the world population could be suffering from myopia. So it's quite an interesting area as an example of those where they are collaborating, particularly in China, where they are selling already some of these myopia control lenses with the FDA approval for the SELO exhaustica Celeste still being in the pipeline as well.

22:03And a quick 30 seconds, Diana, who are some of Nikon's competitors in this space and who does it supply?

22:12Sam Fazeli:So they would be competing with other lenses and also even photographic kind of equipment. And the space is quite diverse at the moment because even with SOR Exotic, it is partnership, just potential extended partnership just shows how the company is going more into the medical technology and medical devices field in terms of trying to also find medical issues just looking at the eye so that's a new area where companies within the ophthalmological and visual space are looking at and lenses companies that are potentially with the consumer more known for the photo cameras also play a role with so it's all quite well integrated and in the world of smart glasses.

23:09Stay with us for more Bloomberg Intelligence coming up after this. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Wan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares.

23:47Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time. The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode, available on Plus and Pro Plans.

24:29Everyone's talking about how AI is transforming work, especially in sales. While the landscape shifts, one thing remains the same, the thrill of closing a deal. Whether it's a gong or a confetti machine, every team has its celebration rituals. Adio is designed for that moment. It's the agentic CRM that turns customer signals into actionable insights, helping you close deals faster with revenue agents and automations working around the clock. You'll have everything you need to scale your go-to market efforts. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. Your social media feed delivers plenty of advice, but it doesn't know you.