SpaceX Agrees to Pay $17 Billion to EchoStar for Wireless Spectrum to Expand Starlink
Deal gives SpaceX two blocks of spectrum, $2 billion to cover EchoStar interest payments and could help Starlink reach cellphones in remote areas; EchoStar says the transaction will address FCC concerns.
SpaceX has agreed to pay $17 billion to EchoStar for two blocks of wireless spectrum, the companies said Monday, a move that could speed the expansion of Elon Musk’s Starlink satellite network into mobile and ground-based 5G services.
Under the agreement, SpaceX will provide $8.5 billion in cash and up to $8.5 billion in SpaceX stock for the spectrum blocks. The transaction also includes roughly $2 billion in cash that SpaceX will pay toward interest on EchoStar’s debt through November 2027, EchoStar said. The company added that it expects the deal to resolve a Federal Communications Commission inquiry into EchoStar’s use of the licenses.
The licenses cover rights to provide ground-based 5G cellular service and mobile-satellite service, which EchoStar and SpaceX said could be used to extend Starlink’s reach to cellphone users in areas beyond the coverage of terrestrial towers. SpaceX has previously expanded Starlink for home broadband and is exploring mobile applications, including a reported arrangement to work with T‑Mobile on phone connectivity.
The Wall Street Journal has reported that T‑Mobile is in talks to lease some of the spectrum rights SpaceX plans to acquire. EchoStar said the transaction will allow it to address concerns raised by the FCC earlier this year about whether the company was effectively using its licenses to compete with major wireless carriers.
In May, FCC Chairman Brendan Carr sent a letter to EchoStar questioning the company’s buildout extension and its commitment to provide 5G service in the United States, and warned that some spectrum rights could be revoked if the agency found the company was not meeting buildout obligations. The FCC action followed scrutiny of EchoStar’s spectrum holdings and public attention on whether licensees were making effective use of scarce mid-band airwaves.
EchoStar’s shares rose sharply on the announcement, climbing about 21.6% as investors reacted to what the company characterized as a transaction that would address the FCC’s inquiry. The deal follows other major spectrum moves this year in the wireless market, including a reported agreement involving AT&T to acquire licenses valued at about $23 billion as part of carriers’ broader efforts to secure mid-band capacity.
SpaceX’s purchase of EchoStar spectrum comes amid the company’s broader push to expand Starlink capabilities. The satellite broadband business currently serves homes, businesses and government users, and SpaceX has moved into mobile services through prior agreements with wireless carriers and by testing direct-to-cellphone links from its satellites.
The transaction also follows a period of corporate reshuffling at EchoStar. Last year, DirecTV terminated an agreement to acquire EchoStar’s satellite television business following a failed debt-exchange offer. EchoStar chairman Charlie Ergen met with then-President Trump in June, and the meeting prompted a subsequent phone call between Trump and FCC Chairman Carr, an episode that drew attention as regulators reviewed EchoStar’s compliance with license terms.
EchoStar and SpaceX did not disclose a precise timetable for closing the spectrum sale or for any immediate operational changes to Starlink. Company statements indicated the transfer of rights would enable SpaceX to pursue multiple deployment options, including building a new cellphone service or sharing spectrum with telecommunications partners.
Regulators and industry analysts will likely monitor how SpaceX deploys the newly acquired spectrum, given long-standing FCC interest in ensuring licensed airwaves are put to use to serve consumers. If deployed for hybrid satellite–terrestrial services, the spectrum could bolster connectivity in rural and remote regions where terrestrial networks are sparse, while also contributing to competitive dynamics among U.S. wireless providers.
The companies said further details about the transaction would be made available as the deal progresses through customary regulatory and closing conditions.