Elon Musk’s SpaceX has entered into a $17 billion agreement with EchoStar Corp. for spectrum licenses, a major step in expanding its Starlink satellite network and advancing direct-to-device connectivity plans.
Gatekeepers News reports that the deal covers EchoStar’s AWS-4 and H-block spectrum licenses, with the terms split evenly between cash and equity. SpaceX will pay up to $8.5 billion in cash and issue as much as $8.5 billion in stock. Additionally, the company has committed to about $2 billion in cash interest payments on EchoStar’s debt through November 2027.
“For the past decade, we’ve acquired spectrum and facilitated worldwide 5G spectrum standards and devices, all with the foresight that direct-to-cell connectivity via satellite would change the way the world communicates,” said Hamid Akhavan, president and CEO of EchoStar.
“This transaction with SpaceX continues our legacy of putting the customer first as it allows for the combination of AWS-4 and H-block spectrum from EchoStar with the rocket launch and satellite capabilities from SpaceX to realize the direct-to-cell vision in a more innovative, economical and faster way for consumers worldwide,” he added.
The agreement gives SpaceX control of key spectrum needed to roll out Starlink’s next-generation “Direct to Cell” service, designed to provide internet connectivity directly to mobile devices without traditional cell towers. Under a related long-term deal, EchoStar’s Boost Mobile subscribers will be among the first to access the service.
News of the agreement lifted EchoStar shares by more than 23% in premarket trading on Monday.
