SpaceX snags EchoStar spectrum for $17B

Elon Musk-owned SpaceX agreed a $17 billion deal to buy EchoStar’s highly sought AWS-4 and H-block spectrum licences after pressuring it to sell off the assets earlier this year.

It will pay EchoStar $8.5 billion in cash and up to $8.5 billion in SpaceX stock. SpaceX also agreed to fund a total of about $2 billion in cash interest payments on EchoStar’s debt through to November 2027.

Prior to reaching a $23 billion deal with AT&T last month, EchoStar faced a debt load of approximately $26.4 billion, according to Roger Entner, founder and analyst at Recon Analytics.

SpaceX coveted EchoStar’s AWS-4 spectrum for its Starlink satellite-based broadband service. It contended the spectrum owned by Charlie Ergen-backed EchoStar was underutilised.

Matters came to a head in May when the Federal Communications Commission (FCC) called out EchoStar’s use of AWS-4 spectrum licences. SpaceX had a strong ally in FCC chair Brendan Carr, who presented EchoStar’s Ergen with his “best and final offer” following a meeting by both with President Donald Trump in June.

The impact for SpaceX is massive, according to Entner. He posted on LinkedIn the real winner of EchoStar’s decision to shutter most of its open RAN-based network is Starlink and partner T-Mobile US.

“A partnership between Starlink and T-Mobile using this 40MHz block would create a massive, ubiquitous network’ that blows competitors’ satellite strategies completely out of the water and cements T-Mobile’s speed advantage for years,” he stated.

While Starlink enjoys an exclusive US partnership with T-Mobile, Musk posted on X last year the satellite operator will seek deals with rival mobile service providers.

As part of the deal, SpaceX and EchoStar will enter into a long-term commercial agreement, which will enable EchoStar’s Boost Mobile subscribers to access SpaceX’s Starlink direct-to-cell service.

The agreement also calls into question EchoStar’s $13 billion contract with MDA Space to build low Earth orbit (LEO) birds for a new non-terrestrial network (NTN) for its direct-to-device (D2D) satellite constellation. EchoStar seemingly no longer needs those birds due to the partnership with SpaceX.

The two companies stated the deal will close once it receives customary regulatory approvals.