SpaceX has agreed to a $17 billion deal to acquire a significant portfolio of wireless spectrum licenses from EchoStar, a move that will dramatically strengthen its Starlink satellite network and propel its direct-to-device services.
The agreement, which was announced on Monday, will see Elon Musk’s space exploration company purchase EchoStar’s AWS-4 and H-block spectrum licenses. The transaction will be a mix of cash and stock, with up to $8.5 billion in cash and an equivalent amount in SpaceX shares. In a further commitment, SpaceX will also fund approximately $2 billion in cash interest payments on EchoStar’s debt.
The acquisition is a strategic triumph for SpaceX, which has been in a long-standing dispute with EchoStar over the underutilisation of its wireless assets. The US Federal Communications Commission (FCC) had launched a review into EchoStar’s spectrum usage earlier this year, and this sale is expected to resolve those regulatory inquiries.
For SpaceX, the deal secures a “standalone spectrum position” that will allow it to build a more robust direct-to-cell service for Starlink. The move complements its existing partnership with T-Mobile and is a significant step towards the company’s stated goal of eliminating mobile “dead zones” around the world.
Gwynne Shotwell, SpaceX’s President and Chief Operating Officer, said in a statement that the company was “so pleased to be doing this transaction with EchoStar as it will advance our mission to end mobile dead zones around the world.”
The deal marks a turning point for EchoStar, which has been under financial pressure in recent months. The company recently agreed to a separate $23 billion deal to sell other spectrum assets to AT&T. The proceeds from both sales will be used to pay down debt and fund future growth, according to EchoStar.
Analysts say the acquisition will give SpaceX more independence in developing its direct-to-device capabilities, which allow smartphones to connect directly to satellites without needing specialised equipment. The AWS-4 spectrum, in particular, is highly valuable as it supports both terrestrial mobile transmissions and satellite-to-ground communications.
The acquisition of this wireless spectrum is the latest in a series of bold moves by SpaceX to solidify its position as a global leader in satellite-based internet. With more than 8,000 Starlink satellites now in orbit, the company has seen rapid growth and has secured regulatory approval in key markets, including India.
The deal is subject to customary regulatory approvals, but the partnership between the two companies has already been set, with EchoStar’s Boost Mobile subscribers set to gain access to Starlink’s next-generation direct-to-cell service. The announcement sent EchoStar’s shares soaring in pre-market trading, reflecting investor confidence in the deal and the company’s new financial footing.
