Elon Musk’s SpaceX has agreed to acquire critical spectrum licenses from EchoStar Corp in a $17 billion deal aimed at accelerating the expansion of its Starlink satellite network and enabling direct-to-device connectivity.
SpaceX will pay $8.5 billion in cash and issue $8.5 billion in stock to EchoStar, securing the coveted AWS-4 and H-block spectrum licenses. The agreement also includes a commitment by SpaceX to cover approximately $2 billion in interest payments on EchoStar’s debt through November 2027.
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For the past decade, we’ve acquired spectrum and facilitated worldwide 5G spectrum standards and devices, all with the foresight that direct-to-cell connectivity via satellite would change the way the world communicates,” said Hamid Akhavan, president & CEO, EchoStar.
“This transaction with SpaceX continues our legacy of putting the customer first as it allows for the combination of AWS-4 and H-block spectrum from EchoStar with the rocket launch and satellite capabilities from SpaceX to realise the direct-to-cell vision in a more innovative, economical, and faster way for consumers worldwide,” he added.
Gwynne Shotwell, COO at SpaceX, underscored that the move aligns with Starlink’s broader mission to eliminate mobile dead zones even in remote areas.
The news sparked a sharp rise in EchoStar’s stock, with pre-market gains ranging from 19 percent to 23 percent. The spectrum sale follows EchoStar’s earlier $23 billion agreement with AT&T, both few moves intended to alleviate mounting pressure from the Federal Communications Commission regarding underutilisation of 5G spectrum.
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The newly acquired spectrum will underpin Starlink’s ‘Direct to Cell’ (or direct-to-device) service, allowing smartphones to connect directly to satellites, bypassing traditional cell towers.
EchoStar’s Boost Mobile subscribers will be among the first to access this advanced connectivity under a long-term commercial agreement. EchoStar confirmed that its other operations, including Dish TV, Sling, and Hughes Internet, will remain unaffected by the transaction.
