SpaceX has reached a $17 billion agreement to acquire wireless spectrum licences from EchoStar Corp., strengthening its Starlink satellite network’s ability to provide direct-to-device services.
The deal, confirmed on Monday, involves up to $8.5 billion in cash and as much as $8.5 billion in SpaceX stock.
This marks one of the largest spectrum transactions in the US, giving SpaceX access to the AWS-4 and H-block spectrum bands.
Beyond the purchase, SpaceX will also fund about $2 billion in interest payments on EchoStar’s debt until November 2027, cementing its role in reshaping satellite-to-mobile connectivity.
$17 billion deal to reshape spectrum ownership
The agreement comes after months of speculation and follows a Bloomberg report confirming SpaceX’s interest in EchoStar’s spectrum assets. Shares of EchoStar jumped as much as 64% in premarket trading after the news.
The proceeds will be used by EchoStar to reduce debt and fund operations, a crucial step for the company which had recently missed bond payments and was weighing bankruptcy.
EchoStar’s spectrum includes AWS-4, also called the 2 GHz band, and the H-block licences.
These frequencies are critical for mobile operators and satellite providers as they support both terrestrial mobile transmissions and satellite-to-ground communications.
The transaction is also designed to ease pressure from US regulators, who had been pushing EchoStar to offload some of its unused airwaves.
Regulatory scrutiny and FCC investigation
The US Federal Communications Commission (FCC) launched an investigation in May into whether EchoStar was meeting its obligations to deploy its spectrum effectively.
The probe was sparked by complaints from SpaceX earlier this year, which argued that EchoStar was not putting its holdings to proper use.
SpaceX had also sought FCC approval for shared access to the 2 GHz band, a request that added urgency to the review.
EchoStar originally gained rights to the 2 GHz band in 2011, when its founder Charlie Ergen acquired them from bankrupt satellite firms DBSD and Terrestar.
However, the FCC’s focus intensified in 2024 after doubts about EchoStar’s ability to deploy its 5G network grew.
Bloomberg reported in July that regulators had been encouraging the company to sell its spectrum, which had become a stumbling block to its strategic plans.
Bloomberg reports that regulators had been encouraging EchoStar to sell its spectrum since July, with pressure mounting as the company struggled to meet financial obligations.
Previous $23 billion spectrum sale to AT&T
This latest transaction with SpaceX follows EchoStar’s decision last month to sell spectrum licences worth about $23 billion to AT&T.
Those assets had also been offered to other buyers, including Starlink.
The two sales combined effectively address FCC concerns, ensuring that unused airwaves are put into active service through larger operators.
EchoStar said that the spectrum deals would allow it to stabilise its balance sheet while maintaining its presence in satellite services.
For SpaceX, the purchase represents an opportunity to reduce reliance on existing partnerships and move closer to offering direct-to-device mobile services independently.
Starlink expansion and global growth
Since launching its first Starlink satellites in 2019, SpaceX has expanded rapidly and had about 5 million customers across more than 100 countries by June 2024.
The company also secured regulatory approval in India that month, opening the door to one of the world’s largest internet markets.
While SpaceX maintains a partnership with T-Mobile to connect mobile devices directly via satellites, the acquisition of EchoStar’s spectrum positions it to strengthen its own service offerings.
The company has also agreed to cover $2 billion in EchoStar’s interest payments through 2027, further demonstrating its financial capacity to handle large-scale deals while pursuing global expansion.
By acquiring the AWS-4 and H-block licences, SpaceX secures a stronger foothold in the increasingly competitive space-to-mobile industry.
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