Elon Musk’s SpaceX has finalised an agreement to acquire 50 MHz of wireless spectrum and Mobile Satellite Service spectrum licenses from EchoStar, strengthening its Starlink satellite network.
Under the deal, EchoStar will sell its AWS-4 and H-block spectrum licenses for a combined value of $17 billion. The agreement includes $8.5 billion in cash and $8.5 billion worth of SpaceX stock. Of the cash portion, $2 billion will go directly towards interest payments on debt held by EchoStar.
SpaceX said this acquisition will accelerate the development and deployment of its “Direct to Cell” constellation, which is designed to deliver broadband-speed internet access directly to mobile phones worldwide. By securing its own spectrum, the company will reduce reliance on third-party network providers and expand its service reach.
Last year, SpaceX received approval from the Federal Communications Commission to proceed with its direct-to-phone Starlink service, with T-Mobile as a partner. With the new spectrum, SpaceX stated it can introduce “optimized 5G protocols” in its direct-to-phone offering once the next generation of satellites is launched. Customers of EchoStar’s Boost Mobile service will also gain access to Starlink’s direct-to-phone connectivity as part of the agreement.
The transaction comes after the FCC launched an inquiry in May into how EchoStar was using its spectrum holdings, following calls from SpaceX for greater scrutiny. According to reports, President Trump personally urged EchoStar CEO Charlie Ergen to move forward with selling the licenses. Shortly before this agreement, EchoStar sold spectrum worth $23 billion to AT&T on August 26.
EchoStar said in a statement that, together with the AT&T sale, the deal with SpaceX will help address the FCC’s concerns regarding its spectrum utilisation.
With this acquisition, SpaceX secures a major step toward its vision of providing reliable global connectivity, while EchoStar resolves regulatory pressure over its spectrum assets.
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