DishNetwork (DISH.US) and Echo Star Communications (SATS.US) completed their merger on December 31. The deal is key to Dish Network Chairman and Co-Founder Charlie Ergen's plan to transform Dish from a shrinking pay-TV business into a wireless service that will challenge the likes of Verizon (VZ.US), T-Mobile US (TMUS.US) and AT&T (T.US).

Dish, which has accumulated huge debt, will now have more cash and time to expand its 5G network construction and mobile and broadband services, including fixed home wireless and low-cost mobile service BoostInfinite.

Ergen, also a co-founder of Echostar Communications, will serve as executive chairman of the newly combined company. Hamid Akhavan, who has served as CEO of Echo Star Communications since March 2022, took over as president and CEO of both companies in November last year.

Data shows that Dish has incurred $24.6 billion in short-term and long-term debt as it transitions from its traditional pay-TV business. The company's TV subscriber base has dropped 37% over the decade, from 14 million in the third quarter of 2013 to 8.8 million in the same period this year. The company is effectively walled off from debt markets, with analysts estimating it will need as much as $16 billion in new capital between 2024 and 2026 to cover expenses, wireless costs and upcoming debt maturities.

As part of the merger, Dish's notes are now convertible into shares of EchoStar Communications stock, according to a filing by the company on Tuesday. The all-stock deal, announced in August, would bring Dish under the control of EchoStar Communications, which operates the satellite network.

John Butler, senior industry analyst at Bloomberg Intelligence, said in a report that as pay-TV subscribers steadily decline, the company's growth relies heavily on increasing 5G market share and it may be difficult for the company to find a profitable niche in an industry dominated by wireless giants. Ergen may seek to tap Echostar Communications' $1.9 billion in cash and approximately $265 million in free cash to fund the expansion.

EchoStar Communications, which provides satellite communications through its Hughes Network Systems and EchoStar Satellite Services businesses, was previously owned by Dish and spun off in 2008. The deal received little federal scrutiny. When it approved the deal on Dec. 7, the Federal Communications Commission said that since Ergen leads both Dish and Echo Star, the deal "will not result in a material change in ownership or control."