SpaceX has agreed to acquire 50MHz of wireless spectrum and Mobile Satellite Service spectrum licenses from EchoStar. This spectrum will be used to enhance the Starlink satellite network. As part of 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.
SpaceX stated that this deal will allow it to develop and deploy its Direct to Cell constellation. This system is designed to provide broadband-speed internet access directly to mobile phones across the globe. Of the cash portion, $2 billion will be made as direct cash interest payments on debt held by EchoStar.
This acquisition follows the Federal Communication Commission’s approval SpaceX received last year to move forward with its direct-to-phone service plans, which involve T-Mobile as a provider. The new spectrum purchase grants SpaceX greater operational freedom and reduces its reliance on other network providers.
SpaceX specifically noted that the new spectrum will enable optimized 5G protocols in its direct-to-phone service once the next generation of satellites becomes operational. The deal also provides customers of EchoStar’s Boost Mobile service with access to Starlink’s direct-to-phone offerings.
The agreement was reached under notable pressure from the FCC, which had launched an inquiry into EchoStar’s utilization of its spectrum holdings in May. This inquiry came after public encouragement from SpaceX. Reports indicate that President Trump personally urged EchoStar CEO Charlie Ergen to sell the spectrum licenses in the weeks that followed. Subsequently, on August 26, EchoStar sold $23 billion worth of spectrum licenses to AT&T.
In a statement, EchoStar expressed its belief that, combined with the AT&T deal, this spectrum sale to SpaceX will resolve the ongoing FCC inquiry.