Under the agreement, EchoStar will transfer 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 paying interest on EchoStar’s outstanding debt.
SpaceX explained that the acquisition will accelerate the rollout of its “Direct to Cell” constellation, which aims to deliver broadband-level internet speeds directly to smartphones worldwide. The company also noted the new spectrum would support “optimized 5G protocols” once its next generation of satellites becomes operational. In addition, EchoStar’s Boost Mobile subscribers will gain access to Starlink’s direct-to-phone service.
The FCC has been closely watching EchoStar’s spectrum use, launching an inquiry in May following SpaceX’s public calls for action. Pressure mounted after former President Trump reportedly urged EchoStar CEO Charlie Ergen to sell spectrum licenses. Just weeks before, EchoStar had already sold $23 billion worth of licenses to AT&T.
In its statement, EchoStar said it expects the SpaceX deal, alongside the AT&T transaction, to address the FCC’s concerns over its spectrum utilization.
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