Elon Musk’s SpaceX has struck a $17 billion deal to acquire wireless spectrum and mobile satellite service spectrum licenses from EchoStar to strengthen its Starlink satellite network.
Under the agreement, EchoStar will sell its AWS-4 and H-block spectrum licenses in exchange for $8.5 billion in cash and $8.5 billion in SpaceX stock. Of the cash portion, $2 billion will go toward direct interest payments on EchoStar’s debt.
SpaceX said the acquisition will accelerate development of its “Direct to Cell” constellation, designed to deliver broadband-speed internet directly to mobile phones worldwide. The new spectrum will also enable optimized 5G protocols once SpaceX’s next-generation satellites are operational.
The deal benefits EchoStar customers as well, giving Boost Mobile users access to Starlink’s direct-to-phone service.
The move follows the FCC’s inquiry into EchoStar’s underutilized spectrum, which came after SpaceX urged regulators to act. Bloomberg reported that former President Trump personally encouraged EchoStar CEO Charlie Ergen to sell the licenses. In late August, EchoStar also sold $23 billion worth of spectrum licenses to AT&T.
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With this sale, EchoStar has effectively abandoned its own direct-to-device satellite ambitions, canceling a $1.3 billion contract with MDA Space for 100 satellites that had been announced just weeks earlier.
SpaceX said the newly acquired spectrum will allow its upgraded satellites to deliver “more than 100 times” the capacity of its first-generation Starlink direct-to-cell satellites.
