ENGLEWOOD, Colo. and HAWTHORNE, Calif. - Sep 08, 2025 (UTC) - Elon Musk’s SpaceX has agreed to acquire wireless spectrum licenses from EchoStar Corporation for approximately $17 billion, a transformative deal that will expand the satellite internet provider’s direct-to-cell capabilities while providing a financial lifeline to the embattled telecommunications company.
Deal Structure and Financial Terms
The agreement involves SpaceX purchasing EchoStar’s entire portfolio of AWS-4 and H-block spectrum licenses for $8.5 billion in cash and $8.5 billion in SpaceX stock, valued at the time the definitive agreement was signed. Additionally, SpaceX will provide approximately $2 billion in cash interest payments on EchoStar’s debt through November 2027.
The transaction represents one of the largest spectrum deals in recent years and comes as EchoStar, the parent company of Dish Network, faces mounting financial pressures and regulatory scrutiny over its underutilization of valuable wireless spectrum assets.
Strategic Implications for Starlink
The spectrum acquisition will enable SpaceX to develop and deploy what it calls a “next-generation Starlink Direct to Cell constellation,” significantly expanding its ability to provide broadband-speed internet access directly to mobile phones worldwide without requiring traditional cell towers.
“We’re so pleased to be doing this transaction with EchoStar as it will advance our mission to end mobile dead zones around the world,” said Gwynne Shotwell, president and chief operating officer of SpaceX. “SpaceX’s first generation Starlink satellites with Direct to Cell capabilities have already connected millions of people when they needed it most – during natural disasters so they could contact emergency responders and loved ones – or when they would have previously been off the grid.”
Shotwell added that with exclusive spectrum access, “SpaceX will develop next generation Starlink Direct to Cell satellites, which will have a step change in performance and enable us to enhance coverage for customers wherever they are in the world.”
EchoStar’s Strategic Pivot
For EchoStar, the deal represents a significant strategic shift as the company abandons its own plans to create a direct-to-device satellite constellation in low Earth orbit. The transaction allows EchoStar to resolve mounting regulatory pressure while securing access to advanced satellite technology through a commercial partnership.
“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.”
Regulatory Resolution and Market Impact
The deal comes under significant regulatory backdrop, as the Federal Communications Commission launched an inquiry into EchoStar’s spectrum utilization in May 2025, following public encouragement from SpaceX. According to Bloomberg reporting, President Trump personally urged EchoStar CEO Charlie Ergen to sell the spectrum licenses in the weeks that followed the FCC inquiry.
EchoStar anticipates that this transaction, combined with its previously announced $23 billion spectrum sale to AT&T in August, will resolve the FCC’s inquiries into its spectrum holdings.
The news sent EchoStar’s stock soaring in early trading Monday, as investors welcomed the financial relief the deal provides to the heavily indebted company.
Commercial Partnership Benefits
Beyond the spectrum acquisition, SpaceX and EchoStar will enter into a long-term commercial agreement enabling EchoStar’s Boost Mobile subscribers to access SpaceX’s next-generation Starlink Direct to Cell service through EchoStar’s cloud-native 5G core infrastructure.
This partnership addresses SpaceX’s need for terrestrial network integration while providing EchoStar’s wireless customers with advanced satellite connectivity options, particularly in areas where traditional cellular coverage is limited or unavailable.
Enhanced Capabilities and Future Outlook
SpaceX indicated that the new spectrum will enable “optimized 5G protocols” in its direct-to-phone service once the next generation of satellites becomes operational. The acquisition gives SpaceX greater operational independence, reducing its reliance on partnerships with traditional network providers like T-Mobile, with which it already has FCC approval for direct-to-phone services.
The transaction is expected to close after receiving all required regulatory approvals and satisfying other closing conditions. Current operations of EchoStar’s DISH TV, Sling TV, and Hughes divisions will not be impacted by the transaction.
EchoStar plans to use the proceeds to retire certain debt obligations and fund continued operations and growth initiatives, providing the company with much-needed financial stability as it navigates the evolving telecommunications landscape.
The deal underscores the rapid consolidation and evolution occurring in the satellite communications sector, as companies race to deploy next-generation networks capable of providing seamless connectivity across terrestrial and space-based infrastructure.
