Elon Musk’s SpaceX has entered into an agreement to acquire wireless spectrum licenses from EchoStar for $17 billion.
The deal includes up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock. It also will see SpaceX pay approximately $2 billion in cash interest payments on EchoStar’s debt through November 2027.
“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,” EchoStar president and CEO Hamid Akhavan said in a statement. “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 realize the direct-to-cell vision in a more innovative, economical and faster way for consumers worldwide.”
The companies have also entered into a long-term commercial agreement, enabling EchoStar’s Boost Mobile subscribers to access SpaceX’s next generation Starlink direct-to-cell service.
“We’re so pleased to be doing this transaction with EchoStar as it will advance our mission to end mobile dead zones around the world,” SpaceX president and COO Gwynne Shotwell added. “SpaceX’s first generation Starlink satellites with Direct to Cell capabilities have already connected millions of people when they needed it most – during natural disasters so they could contact emergency responders and loved ones – or when they would have previously been off the grid. In this next chapter, with exclusive spectrum, SpaceX will develop next generation Starlink Direct to Cell satellites, which will have a step change in performance and enable us to enhance coverage for customers wherever they are in the world.”
EchoStar expects the SpaceX deal, as well as its previously announced spectrum license sale to AT&T for $23 billion, to resolve a review launched by the Federal Communications Commission into the company’s compliance with certain federal obligations to provide 5G service in the U.S.
The review, launched in May, followed complaints from SpaceX that EchoStar was leaving “valuable mid-band spectrum chronically underused,” and that the FCC should take steps to let “new satellite entrants” use it. President Donald Trump would eventually weigh in, urging FCC chair Brendan Carr and EchoStar to reach an “amicable” deal over its wireless licenses.
Closing of the SpaceX deal is subject to regulatory approval and satisfaction of other closing conditions. The proceeds will be used to retire certain debt obligations and fund EchoStar’s continued operations and growth initiatives. EchoStar’s Dish TV, Sling and Hughes will not be impacted by this transaction.
