Space company MDA surprised by EchoStar's scrapped agreement, CEO acknowledges
In a surprising turn of events, MDA Space Ltd.'s shares took a significant hit on Monday, as the company's stock dropped by around 20 per cent, amounting to approximately $8.76. This report was first published on September 8, 2025, by The Canadian Press (Byline: Ian Bickis).
The cause of this sharp decline can be traced back to SpaceX's acquisition of EchoStar's AWS-4 and H-block spectrum licenses. The deal, worth about US$17 billion, was finalised in cash and SpaceX stock, including $2 billion for EchoStar's debt interest payments through 2027.
The acquisition marks SpaceX's push further into providing satellite-based internet services directly to smartphones. EchoStar, initially set to be MDA Space's anchor customer for its 5G-capable satellites, has now become a competitor, potentially disrupting MDA Space's plans.
EchoStar's decision to sell its spectrum licenses came as a surprise to MDA Space, and it remains to be seen how the company will navigate this new competitive landscape. However, MDA Space reiterated its 2025 financial outlook and guidance, indicating a determination to weather this setback.
Despite the recent loss, MDA Space's shares are still more than double the price compared to a year ago. The company still has a substantial $4.6 billion backlog of deals excluding EchoStar, and it continues to secure contracts for robotics on the International Space Station, as well as for designing and delivering satellites for Globalstar's broadband network.
Moreover, MDA Space is in talks with other firms to be a provider in an accelerating satellite market. The global rise in geopolitical tensions is also increasing interest in the satellite-provider market, which could present new opportunities for MDA Space.
The terminated EchoStar contract, initially valued at about US$1.3 billion, with the potential to grow to US$2.5 billion, will result in MDA Space being compensated for all related termination costs and fees under the agreement. The exact amounts owed were not disclosed.
In the face of this challenging situation, MDA Space remains resilient, with a focus on its ongoing projects and future prospects. The company's commitment to its 2025 financial outlook and its continued negotiations with other firms indicate a strong resolve to maintain its position in the competitive satellite market.
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