EchoStar - Earnings Call - Q4 2020
February 23, 2021
Transcript
Speaker 0
Ladies and gentlemen, thank you for standing by, and welcome to the EchoStar Earnings Conference Call for the Fourth Quarter and Year End twenty twenty. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Terry Brown.
Thank you. Please go ahead, sir.
Speaker 1
Thank you. Good morning, everybody, and welcome to our earnings call for the 2020. 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 Equistar Satellite Services and Dean Manson, General Counsel and Secretary. As usual, we invite media to participate in a listen only mode on the call and ask that you not identify participants or their firms in your report. 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.
Speaker 2
Thank you, Teri. 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 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 ks filed today 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. Mike, over to you.
Speaker 3
Thank you, Dean, and thanks to all of you that decided to join us today for our Q4 twenty twenty earnings call. By all accounts, 2020 brought its share of challenges, but the EchoStar team rose to the occasion and once again delivered solid financial results. I'm very pleased with our 2020 performance as evidenced by growth over 2019 in both revenue and adjusted EBITDA. As we enter the second year of the global pandemic, we continue to supply the connectivity on which millions of consumers, enterprise, government agencies and communities depend. I'm also proud of the EchoStar team's efforts and operational accomplishments in delivering services that have never been more vital to our customers.
Let me now turn it over to the management team to expand on their business segments before closing with some final comments and then the question and answer period. Bradman?
Speaker 4
Thank you, Mike. I'd like to echo Mike's comments and say that I'm extremely proud of our performance and our financial results. Hughes 2020 revenue was our highest on record. Our adjusted EBITDA grew 7% in the fourth quarter and 8% for the full year compared to the same periods last year. Our 2020 adjusted EBITDA margin was 38.9%, increasing from 36% in 2019.
We grew our HughesNet subscriber base by approximately 87,000 during this year, and we're recently recognized by US News and World Report three sixty reviews as the best satellite Internet provider of 2021. This is welcome validation of our dedication to connecting the unconnected to a high performance Internet service. We ended 2020 with 1,564,000 subscribers. In the fourth quarter, our subscriber base in The US declined by approximately 27,000. As you know, our US consumer offering is currently capacity constrained.
As a result, we continue to manage our sales and marketing efforts to optimize service to our existing subs. We also continue to innovate to enhance the customer experience, applying advanced technologies such as artificial intelligence across our network. Driven by the ongoing strong demand for broadband services and our focus on offering ancillary services that enhance our customers' experience, our US ARPU has steadily increased. We expect these trends to continue in the near term. In Latin America in Q4, we grew our subscriber base by approximately 11,000 and improved ARPU over the previous quarter.
Our sales slowed in this market relative to the third quarter as COVID nineteen pandemic restrictions eased, and many people returned to schools and offices on a regular basis. We saw an increase in churn, which we believe is partially due to changes we made in our collections process impacting net sub additions. Community WiFi services, which we offer in partnership with Facebook Connectivity, continue to be an important offering for us in Latin America. We now have more than 1,500 of these Hughes Express WiFi hotspots deployed and are focused on improving monthly ARPUs with targeted marketing activities. We expect to see ongoing growth in these consumer markets in 2021.
For our North American enterprise business, the team continued to drive an increase in orders relative to the 2020. We closed upgrades and extensions with several large accounts and saw a significant increase in our field deployment activity. With the increase in activity through q three and q four, we completed more enterprise deployments in 2020 than in 2019. What's more, the enterprise group received significant recognition in industry analyst reports during the quarter with both Frost and Sullivan and Gartner publishing research that highlighted the team's capabilities in the managed services market. We continue to invest in expanding our market leading capabilities and in innovation across our managed services portfolio.
Investments in artificial intelligence have allowed us to automate identification and resolution of network problems. These capabilities are being leveraged across our North American and international enterprise customers, as well as our internal consumer operations. In the international enterprise business, we see projects resuming and new opportunities developing. One of the world's preeminent financial companies has extended its service agreement with us to provide managed services to their locations across The Americas, Asia, Africa, and The Middle East. In India, we received an order to implement more than 4,000 ATMs in support of the State Bank of India.
The new order brings our total to more than 50,000 ATMs being serviced in India. Also there, we received expansion orders from Reliance Jio to provide four g backhaul services in seven states and to add more than 600 VSATs as part of the BharatNet program to connect villages across the country. In the Asia Pacific region, we won a project with a large maritime service provider to deliver a Jupiter system and an initial order of 500 modems. In Africa, in support of one of the region's largest national governments, we've been awarded a contract by a service provider to deliver a Jupiter system supporting land mobility for government vehicles. And we continue to work on closing our joint venture agreement with Bharti Air Telaninia.
This, as previously noted, this is subject to regulatory approvals. For our defense business, 2020 was an outstanding year in terms of sales, culminating in the fourth quarter with follow on orders from major prime contractors and classified customers. Our government enterprise group was chosen as an approved provider by the Georgia Technology Authority under its GTA Direct program that makes it easy for eligible agencies to procure essential broadband connectivity from use. The team also continues to roll roll out networks for four state agencies across approximately 500 locations in Pennsylvania. We look forward to continued momentum in these business segments in 2021.
Our Jupiter three satellite continues to progress at Maxar. In December 2020, we contracted for the launch of this satellite. We have received an updated schedule from Maxar, and we now expect to launch in the 2022. This delay is due in part to the COVID nineteen restrictions that every company is facing and in part to production issues with certain components. We are working diligently with Maxar to both mitigate these issues and identify ways to recover this schedule without risk to the satellite.
In addition, our launch vehicle should limit the amount of time related to satellite orbit raising, which will assist our in service schedule. Although we are disappointed with this delay, we remain excited about Jupiter three as it will bring significant additional capacity to our markets as well as the ability to offer high speed service plans to our customers. In addition, we have started exploring potential architectures for the next generation Jupiter satellites. We expanded our role with OneWeb, the LEO broadband satellite company, with a contract to develop and manufacture essential ground system technology for the new LEO constellation. In a three year agreement valued at approximately $250,000,000 Hughes will produce the gateway electronics and the core module that will be used in every user terminal.
Designed by Hughes, this core module is uniquely adaptable across fixed as well as aeronautical and maritime mobility terminals for either electronically or mechanically steered antennas. OneWeb resumed deployment of its broadband satellite constellation with a December 18 launch of 36 satellites, the first since the company emerged from chapter 11 bankruptcy. Hughes operates in an evolving industry and a changing market as we have for fifty years. We've learned a lot along the way. For example, we know that for the HughesNet customer, the top priorities are speed, bandwidth, and price.
We also know that the great majority of traffic on the Internet is video, which is insensitive to latency, yet requires a significant amount of capacity. That's why geostationary satellites are ideal for the rural consumer and business markets that we serve, delivering superior economics and large volumes of capacity right where we need it. And make no mistake, due to the size of our addressable consumer market and the cost of other technologies in servicing low household density areas, we have a substantial opportunity for our HughesNet service. With the launch of Jupiter three and one hundred megabit service plans, we expect to maintain our market leading position in rural underserved markets. The demand is there and it's growing.
The satellite broadband connectivity market is large enough to support different service providers with multiple technologies. Even with new constellations and planned launches, there will not be enough capacity in the foreseeable future to meet the demand in our primary markets, let alone the rest of the world. In addition to our thriving consumer business, we possess a diversified enterprise organization and partners in our industry continue to rely on our engineering expertise to propel their businesses. Across all of these markets, our multi transport innovations will bring the best available technology to meet our customers' needs. We'll continue to progress and innovate as the market changes and thrive like we always have.
All in all, it was a very strong quarter and year, and I look forward to another productive year as we celebrate a half century of satellite leadership in 2021. Let me now hand it over to Anders.
Speaker 5
Thanks, Pradhan, and good morning. In Q4, ESS revenue was $4,000,000 down slightly from Q4 of last year. We continue to pursue opportunities to lease our excess Ku band capacity. The overall FSS market continues to be soft, and declines in demand for IFC capacity has obviously impacted the current environment. We are staying focused on this market, so we are ready to react when the rebound occurs.
We mentioned last quarter that the first pair of NGSO S band satellites for our EchoStar global subsidiary were in the commissioning phase. Unfortunately, both satellites have experienced technical anomalies that preclude them from fulfilling their intended regulatory milestone missions. Although I would like to note that our EG one satellite is still operational, and we are using it for testing. We intend to seek regulatory milestone relief due to the force majeure events. And despite this setback, business development activities continue.
And we've been pleased with the interest the EchoStar Global Mission has received from a range of vertical players. Our third nanoSat is expected to launch in either Q2 or Q3 of this year, and we are evaluating options for additional spacecraft. With respect to developments in Europe, EchoStar Mobile has successfully launched its new Synergy service, a hybrid offering that seamlessly integrates satellite and terrestrial LTE roaming services in a single small low cost mobile terminal using a single subscription and management portal. We continue to see strong interests from our distribution partners in all of EchoStar Mobile's new products and services, and we are excited to see many of the new opportunities for application of MSS technologies through a variety of emerging verticals, including autonomous platforms and five gs integration. Additionally, we have launched several initiatives to deploy new hybrid satellite and terrestrial technologies and services on our e 21 platform.
On the satellite IoT front, we are working with ProESIS and others to develop and deploy the first real time bidirectional satellite delivered low road RAN services, which will leverage next generation technology that fully integrates satellite and terrestrial services on a single chip. We expect the initial operations of the low Ruguan service to begin in the second half of this year. We are also working with Sequans and others to develop hybrid services leveraging our complementary ground component licenses in Europe. These new services will focus on industrial enterprise applications such as utilities, transportation logistics, and maritime, as well as emerging verticals such as unmanned aerial systems and urban air mobility. Finally, as always, we remain focused on our longer term strategic goal of full integration of S band satellite services into the emerging global five gs network.
I'll now turn it over to Dave.
Speaker 6
Thank you, Anders. My comments this morning will be primarily on Q4 results and include comments on adjusted EBITDA, which is reconciled to GAAP measurements in our press release. Consolidated revenue in the fourth quarter was $489,000,000 down $10,000,000 compared to the same period last year. Hughes revenue was $482,000,000 down $9,000,000 compared to fourth quarter of last year. Higher consumer revenue from increased ARPU and growth in Latin American subscribers were offset by lower equipment sales to enterprise customers, primarily due to the impact of the OneWeb bankruptcy in Q1 twenty twenty.
In addition, we experienced negative foreign exchange impacts of approximately $10,000,000 principally related to revenue in Brazil. ESS revenue in Q4 was $4,000,000 down slightly as compared to the same period last year. And Corporate and Other revenue was $3,000,000 also down slightly compared to last year. Consolidated adjusted EBITDA in the fourth quarter was $167,000,000 an increase of 7% from last year. Hughes adjusted EBITDA in Q4 was $188,000,000 higher by 12,000,000 Hughes adjusted EBITDA margin increased by 3.2 percentage points, largely as a result of growth in the higher margin of Consumer Broadband business.
ESS and Corporate and Other were primarily flat as compared to last year. Net loss from continuing operations was $3,000,000 in Q4, an improvement of $54,000,000 from last year. This change was primarily due to higher operating income of 7,000,000 lower net interest expense of $47,000,000 driven primarily by $50,000,000 of interest expense accrued in the 2019 related to our fee dispute with the Government of India, improvement in foreign currency transactions of $6,000,000 and higher gains on investments of $6,000,000 This was partially offset by higher income tax provision of 10,000,000 Capital expenditures in the quarter were $114,000,000 compared to $104,000,000 in Q4 last year. The increase was primarily due to spend associated with our J3 ground infrastructure as we start to prepare for the service launch. Free cash flow, defined as adjusted EBITDA minus CapEx, was $53,000,000 during the quarter.
In 2021, we are targeting both revenue and adjusted EBITDA growth. We plan to manage our U. S. Consumer activity to maximize profitability and expect continued growth in our LatAm consumer markets. We foresee meaningful recovery in our Enterprise Equipment sales and services, With the lingering impacts from the pandemic in this segment of the business, we believe 2021 will be stronger than the first, especially internationally.
The new agreement with OneWeb should provide incremental growth. We will continue to prudently manage all expenses, including those associated with the JUPITER III launch readiness. In December 2020, we bought back 1,700,000.0 shares of our stock in the open market at a cost of $38,000,000 Through 02/11/2021, we had repurchased an additional 2,900,000.0 shares for a cost of approximately $65,000,000 Our cash and marketable securities balance at twelvethirty one was $2,500,000,000 and our seven fiveeight senior unsecured notes of $900,000,000 are due in June, and our intent at this time is to repay them out of current cash. With that, I'll turn it back over to Mike.
Speaker 3
Thank you, Dave. As you can all see, we've had a successful year, and I remain extremely excited about our position within the satellite communications industry. Demand for global connectivity continues to outpace supply, and we remain well positioned from a technology and financial standpoint. Let me now turn it over to the operator to start the question and answer session.
Speaker 4
Thank you.
Speaker 0
Your first question comes from the line of Rick Prentiss from Raymond James. Your line is open.
Speaker 7
Thanks. Good morning, guys.
Speaker 6
Good morning, Rick.
Speaker 7
Hey. First, I know I'm glad. I think the market is also to see you put your balance sheet to work on stock buybacks. It looks like maybe close to $400,000,000 left on the authorized plan compared to your $2,000,000,000 market cap. Just want to confirm that that's right.
And we think the best M and A opportunity is to buy your own stock where it's at. But what other M and A opportunities might be out there that you'd be interested in and might want?
Speaker 6
Well, as you know, Rick, I mean, we've been looking at a lot of different opportunities over a period of several years. And I think we remain interested in transactions that make sense where it grows our customer base, grows our technology base, and provides for incremental growth. That's where we remain focused.
Speaker 7
And on the buybacks, it's about $390,000,000 maybe left. Is that ballpark?
Speaker 6
Yes. I'm sorry. You had the numbers right. That's approximately correct as of the filing.
Speaker 7
Okay. And then obviously, the Jupiter three has been delayed a little bit with Maxar. Are there any abilities to recover costs from them with the delay? And also as you think about growth, pre Jupiter three launch, can we should we think of this quarter sub decline as kind of more similar to what you might experience until the launch? And obviously, ARPU increases can help offset that, but just trying to think through the delay and the impact.
Speaker 3
Well, we're working all the options as far as the contract with MaxSort, and I don't think I'm going to say anything more about that. We still need the spacecraft, and we're very disappointed in the delays. It's that simple. The issue with The US sub count is that with the continued growing demand of each consumer in the Jupiter two and Jupiter one field, we try to manage the number of customers we can support along with the capacity constraints. We try to make sure the capacity is what our customers need.
And therefore, at times, we do, in certain beams, allow the sub count to go down to ensure that we've got solid support of the plans that people are buying. So I can't totally predict it. As more and more people hopefully return to office and and work from home demand goes down. I would think that'll have a positive impact on our ability to add subs, but I I can't say for sure. You know, I don't know what things are gonna look like for the next six months.
So, yeah, I don't I don't expect major changes, either up or down, as we manage through customer requirements in turn.
Speaker 7
And as we think of the Jupiter three getting in service, Prabhma, I think you mentioned that the launch vehicle choice would reduce the time from launch to in service. Can you give us an idea of how fast that might be? And I know people are very interested in knowing how much capacity will the Jupiter three bring on and what that might do for growth as we look beyond the launch and service dates.
Speaker 3
Well, I think we've talked capacity in the past, and I don't see any reason to keep going over that. Nothing's changed as far as the spacecraft as it's gone through the design. The delivered capacity is expected to be pretty close to spec. As to the launch vehicle, the time through in orbit testing and getting into service, I got to be honest with you, we're working that every day. And that is one area with the delay in the production of satellite that there's a possibility of gaining back some in service time.
However, the opposite of that is we do not wanna take we do not wanna rush through in orbit testing in a way that might have a negative impact on the spacecraft or our ability to meet spec as we get going. So it's very precise activity we've got to be careful of. But we're going to shave off every possible day from the time we launch till the time we're in service. But again, that's a work in progress.
Speaker 7
Okay. Last one for me. Another work in progress has been the JV in India. A lot of business happening in India. Can you help us understand what you think a a reasonable time frame is that that, that deal might close as it, you know, continues to to wait approval?
Speaker 4
Yeah. We're we're we're aiming for, somewhere in the middle of the year.
Speaker 7
So mid twenty two.
Speaker 4
Yeah. It's it's it's being held. You know, we have to get through a bunch of No. No.
Speaker 7
Mid yeah. Mid twenty one. Mid twenty one. Sorry. I misspoke.
Yeah.
Speaker 4
We're, actually working through some regulatory approvals. Everything is all set. As soon as we get the last couple of regulatory approvals, we should be ready to close the deal.
Speaker 7
And then hit the ground running pretty fast?
Speaker 5
Yeah. Yeah.
Speaker 7
Great. Thanks, guys. Stay well.
Speaker 3
Thank you.
Speaker 0
Your next question comes from the line of Chris Toti from Quilty Analytics. Your line is open.
Speaker 8
You. Pravin, I wanted to follow-up on the consumer ARPU, which you indicated was up both in The U. S. And international. In The U.
S. Market, is the increasing ARPU more a function of existing customers stepping up their plans, or is it simply a mix issue of some lower value subscribers dropping off?
Speaker 4
Well, definitely, it's the existing customers stepping up. You know, as as this COVID crisis has been obviously spreading all over and increasing the demand for the services. So people are stepping up, going up to higher plans, etcetera, which has a good effect on the ARPU, but obviously has an impact on the number of subs you can accommodate over these satellites. So that's one part of it. The other part of it is we're selling some additional ancillary services, which adds to the ARPU.
You know, for example, repair services. People don't want their unit down and are willing to pay extra money to have quick repair services. And we we we sell tokens for extra capacity. So there are a whole bunch of little things that add a dollar or $2 to to to our ARPU for these subscribers, which is very good money because the costs against that are very little.
Speaker 8
Understand. And as you think about more people returning back to work, obviously, this COVID period caused very different demand patterns than what you've seen in the past with respect to the time of day. And as people go back to work, and perhaps they stepped up their plan because they were using a lot more capacity, If you see a shift back to normal patterns where people are, you know, more heavily using the service, say, after five p. M, do you still have the right amount of capacity in the way that you've metered it out so that you can, you won't be forced to drop people from the plan?
Speaker 4
Yeah. You know, it's one of those things that's that's evolving all the time, and it's very difficult, as Mike mentioned earlier, to predict exactly what will happen when in terms of the demand. So we are constantly adjusting the plans and adjusting the allocation of bits to the different plans and to the different subs to try to maintain a balance between customer satisfaction and, you know, and and capacity, number of subs that we and this is a process that's going on every day as we evolve, and we just have to see what how this come back to normal develops. And it probably won't develop the way we think it will, like everything else about COVID that has been there, but it's something we we try to optimize continuously.
Speaker 8
Understand. Shifting to the enterprise market, and if we can set aside OneWeb and as a stand alone and then look at the balance of the enterprise business, you know, it it it appears that for the past couple of years, the enterprise revenues and installations have been struggling. As we come out of COVID, do you see any prospects for the enterprise business putting up a year of growth, again, excluding the OneWeb business?
Speaker 4
You know, yes. The answer is yes. And we have been reasonably pleasantly surprised and excited about the what's happening in that market. We're suddenly seeing major corporations wanting to either expand the the breadth of the services we offer today or brand new customers or brand old customers with brand new requirements. And if you look at the enterprise business for us, you got The United States and you got the rest of the world.
The United States is primarily with the Fortune 1,000 companies using for for the access technology using primarily terrestrial technologies. Internationally, like we mentioned about India and Brazil and and many of the other countries in Far East, It's primarily satellite driven still, and our our our dominance in our VSAT technology gives us a very, very high market share in those areas. And both internationally and domestically, we expect '21 to be a good year.
Speaker 8
Great. And back to OneWeb, you know, can you give us any sense of how much of that $250,000,000 you had pre had burned through prior to, the chapter 11 bankruptcy? And and how do you see that rollout progressing, for the balance over 21,000,000?
Speaker 4
Is a brand new 250,000,000 after bankruptcy. You know, we when when they went bankrupt, we we had to terminate the old contract, and we got paid for all the work we had done at that time. And so we started off after bankruptcy from zero, and this is a brand new 250,000,000 from that time for the next three years.
Speaker 8
And will it be equally distributed over the next three years, or is it upfront loaded?
Speaker 4
Well, I think the first two years will take most of it, and then there'll be, you know, probably six months worth of stuff left in the third year.
Speaker 7
Great.
Speaker 4
And then it goes fairly linearly because we ship, you know, gateways to 42 sites all over the world, you know, almost on an equal timing basis.
Speaker 8
Got it. And one question for Anders on the the failed small sats. Have you been able to trace back the cause of those failures to, you know, payload design issues, or were these simply bus related issues?
Speaker 5
They weren't payload related at all. The we we had we had an issue relating to the propulsion system, which because of the orbit that this that our filing specifies and where sort of rideshare and standard launch vehicle fleet you off in the SSO orbits, we have to change our altitude and our inclination. And in both instances, the the propulsion system onboard the spacecraft malfunction.
Speaker 8
And you indicated that you're you will look for a a force majeure in order to replace those satellites and and continue testing. And and were you able to get any testing done with the satellites prior to their failure?
Speaker 5
Well, only one failed completely. The other one, we're still in communications with and are running tests across it right now. So but the third satellite, which is due to go up on a rideshare mission right now in June, it's of a completely different design from from both the the bus, the propulsion system, but it does have the same radio payload. So the payloads on the first two satellites were operational and were working fine.
Speaker 8
Understand. All right. Thank you very much.
Speaker 3
Thanks, Chris.
Speaker 0
Your next question comes from the line of Rick Prentiss from Raymond James. Your line is open.
Speaker 7
Hey, guys. Thanks for taking a couple of follow-up questions. I wanna follow Chris' line there on on OneWeb. I think there had also been some discussion that maybe you could be a distribution or services or some other kind of partner besides just the equipment. Can you elaborate if there's other potential for working with one eleven might what it might entail?
Speaker 4
Yeah. Absolutely. You know, we're a service provider all over the world. And in the different service offerings that we have, we expect to be leasing, depending on the market requirements, some capacity from OneWeb and bundling it into the other services we offer to our existing customers and new new customers.
Speaker 7
And when can that start given the one web timing for their constellations to go up?
Speaker 4
Well, their constellations you know, as soon as their constellations are up and tested, we'll we'll start. We've got customers today who who would love to have us not only offer the geo services we normally offer, but do offer LEO services and combined LEO geo services. So we you know, as as we've said in the past, we think a a LEO GEO combination is a a is a great great way to address the the markets that our customers are in because they have strengths for different applications. So as soon as they're ready, we'll be we'll be ready to to to to lease capacity, especially in the markets where we have service companies like India, Brazil, Europe, Africa, Middle East.
Speaker 7
And, obviously, Bharti is one of the ones that helped helped bring Sunweb out of bankruptcy as well as the UK government. What time frame do you think that constellation will be ready to help you do bundling in India, say, instance?
Speaker 4
I think approximately two years from now.
Speaker 7
And other topic I wanted to make sure, obviously, we're finding out of the quiet period from the RDOF option. You guys didn't get much there. Viasat didn't get any, but SpaceX did get a lot. Can can you just share with us kind of your thoughts on on what happened in the RDOF auction and how that impacts the future dynamics?
Speaker 4
Well, I I think, you know, SpaceX got what about 80,000,000 a year for ten years. And in the scheme of things, it's it's it's sounds like a big number, but it's not really that big. Right? If you look at the number of subs that it'll it'll help them subsidize, I think the number with the different calculations comes to, like, 40,000 subs a year or some somewhere in that region. So, you know, we have one and a half million subs up already.
So 40,000 a year, you know, it's I wish we had it, but but it's not a it's not a overwhelming number either in the scheme. They've they've gotta be looking for for number for, like, a million subs or something like that. So 40,000 a year isn't gonna be that big a deal.
Speaker 7
Okay.
Speaker 4
You know, I think they got a favorable ruling from the FCC, which impacted our we we we didn't think the FCC was going to give that kind of a favorable ruling, but they did. And, that's probably where we maybe didn't do as well as we could have.
Speaker 7
Okay. And then, one for Dave. You had mentioned, I think the 10 k mentions a limited number of enterprise customers are filing bankruptcy. Can you help us understand kind of sizing that risk and what might be and how you've kind of already positioned the bad debt reserve?
Speaker 6
Yeah. I mean, we're fully reserved on that. And that was really earlier in the year in the midst of COVID. I mean, you obviously had OneWeb. You've obviously got Global Eagle.
That was a customer of ours. So there's a number of retail customers. We're working with those customers going through the bankruptcy process and fully reserved. And hopefully, we end up being over reserved, that we get some proceeds out of the final conclusion. But we're pretty comfortable in all the positions on the companies that have filed bankruptcy.
It slowed some growth that impacted revenue recognition for a while. Certainly some of those customers downsized their orders from us. But I don't know that we've lost one entirely among those various customers that filed.
Speaker 7
And also the India AGR ruling resolved. How was that reserve? And how is that going to play forward over the next ten years?
Speaker 6
Good question. There's still a lot of rulings to come down from the India DOT and Supreme Court. We believe that we are fully reserved for it and hopeful I can't even say optimistic but hopeful that we get some rulings in our favor that indicate that we're over reserved. But right now, we're under reserved. And if we've got to pay it out under the most current rulings, it'd be paid out over ten years.
Speaker 7
Okay. Thanks for the follow-up, guys.
Speaker 0
There are no further questions. I now turn the call back to Terry Brown for closing remarks.
Speaker 1
Okay. Thank you, everybody, for joining today, and we look forward to talking to you next time.
Speaker 0
That concludes today's Thank conference you, everyone, for joining. You may now disconnect.