Elon Musk’s SpaceX has reached a deal worth about $17 billion with EchoStar for spectrum licenses that it will use to beef up its Starlink satellite network.
The deal for EchoStar’s AWS-4 and H-block spectrum licenses includes up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock. SpaceX will make approximately $2 billion in cash interest payments on EchoStar debt through November 2027.
SpaceX and EchoStar will enter into a long-term commercial agreement which will allow EchoStar’s Boost Mobile subscribers to access SpaceX’s next generation Starlink Direct to Cell service.
Shares of EchoStar surged 19% before the market opened Monday.
The Douglas County company was cofounded in the early 1980s by Charlie Ergen, who also started Dish Network, the satellite TV service. EchoStar merged with Dish at the end of 2023.
Last month AT&T said that it will spend $23 billion to acquire wireless spectrum licenses from EchoStar, a significant expansion of its low- and mid-band coverage networks.
EchoStar said that it anticipates that the AT&T deal and the SpaceX transaction will resolve recent inquiries from the Federal Communications Commission about the rollout of 5G technology in the U.S. The FCC had been calling for hearings on whether Echostar was properly using the spectrum that it is now selling, and its efforts to make 5G more available to communities.
EchoStar said Monday that it will use the proceeds from the sale partly to pay down debt. Current operations of Dish TV, Sling and Hughes will not be impacted, the company said.
Starlink, which provides satellite broadband service, was recently awarded $9.1 million of Colorado’s share of federal dollars to build infrastructure to serve 5,400 households with poor internet service. It was part of the state’s $826.5 million proposal for the federal Broadband, Equity, Access and Deployment program, which now must be approved by the National Telecommunications and Information Administration.
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