SpaceX has just fired one of the biggest shots yet in the spectrum wars. The company has agreed to pay $17 billion to take over a massive chunk of wireless airwaves from EchoStar for its Starlink Direct-to-Cell services. This deal is the most aggressive signal yet that SpaceX intends to rule the satellite-to-phone market.
The significance of the sale, which involves SpaceX paying a mix of $8.5 billion in cash and $8.5 billion in SpaceX stock, centers around a finite resource known as spectrum. Spectrum refers to the range of radio frequencies that carry wireless signals for everything from phone calls and texts to GPS and satellite communications.
The U.S. government, via the Federal Communications Commission, divides spectrum into bands. There are only so many usable frequencies, and users must coordinate to avoid interference. To raise the stakes even higher, only certain ranges work well for phones and satellites. This shrinks the pool of usable bands even further and creates a fierce competition for access.
The FCC auctions long-term licenses at high prices to private firms. The prime cellular bands were predominately amassed by national wireless carriers like AT&T and Verizon, while incumbent satellite operators like Iridium and Globalstar held separate bands.
In 2024, the FCC approved a new regulatory framework called Supplemental Coverage from Space. This framework paved the way for satellites to legally extend carrier networks. It lets a satellite operator, in partnership with a terrestrial carrier, use the carrier’s existing phone spectrum to fill wireless coverage gaps as a secondary service. Later that year, SpaceX officially began offering its Direct-to-Cell service to T-Mobile users as a premium add-on.
That framework also paved the way for SpaceX’s deal with EchoStar. It created a structure to let satellite operators tap into terrestrial networks. Now, with the EchoStar deal, SpaceX does not need to partner with a terrestrial licensee for spectrum. Instead of depending on relationships with other firms, SpaceX has become the license holder itself.
Of course, SpaceX is in the business of building rockets and satellites, not cell phones, so it still depends on hardware makers and carriers to reach hundreds of millions of consumers. But SpaceX CEO Elon Musk has floated the idea of building a phone under his other business, X, which merged with xAI earlier this year. Musk has taken aim in particular at Apple’s ongoing collaborations with OpenAI. In August, X and xAI filed a lawsuit against the two companies, alleging anti-competitive practices.
Apple satellite features like Emergency SOS are enabled via a partnership with Canadian firm Globalstar. Apple has committed over $1.5 billion to further expand satellite-enabled iPhone services. Some analysts are wondering if SpaceX’s move is leverage to persuade Apple to cooperate with SpaceX instead of Globalstar.
This is not the first time SpaceX has flexed its muscle in the spectrum wars. The company spent years successfully battling Dish, a subsidiary of EchoStar, over the 12 GHz band that SpaceX wanted to use for Starlink. It also had a dispute with Dish and EchoStar over their lack of use of the AWS-4 band, which is one of the spectrum licenses it has now acquired.
Separately, SpaceX and Kuiper have also sparred in FCC filings over interference rules and how competing satellite megaconstellations should share spectrum. They have been a major force propelling the FCC to revisit satellite spectrum-sharing rules. Earlier this year, the Commission opened a formal rulemaking to modernize satellite sharing limits after a petition from SpaceX, with Kuiper and others filing in support.