SpaceX announced a $17 billion deal to acquire wireless spectrum licenses from EchoStar. The purchase will support Starlink’s satellite-based 5G network. The agreement also allows EchoStar’s Boost Mobile subscribers to access Starlink direct-to-cell service. This arrangement will extend satellite coverage to previously underserved areas, highlighting the Federal spectrum impact on U.S. mobile services.
SpaceX plans to deploy upgraded, laser-connected satellites. The company said this move will increase Starlink’s network capacity by more than 100 times. Gwynne Shotwell, SpaceX president and COO, said the deal will help “end mobile dead zones worldwide.” Exclusive spectrum allows SpaceX to develop next-generation Starlink Direct-to-Cell satellites. These satellites will enhance coverage for customers wherever they are in the U.S., showing the growing Federal spectrum impact on next-generation connectivity.
The announcement drove EchoStar shares up 19% in early trading. Meanwhile, U.S. wireless carriers AT&T and T-Mobile lost more than 3% of their share value, while Verizon declined over 2%. Wireless usage in the U.S. continues to rise rapidly. Americans consumed a record 132 trillion megabytes of mobile data last year, marking a 35% increase over the previous record, according to CTIA.
Since 2020, SpaceX has launched more than 8,000 Starlink satellites to build a low-Earth orbit network. The system serves militaries, transportation firms, and rural consumers. About 600 of these satellites launched this year support the direct-to-cell network.
Deploying larger Starlink satellites depends on Starship, SpaceX’s next-generation rocket. The rocket’s complex test launches bring it closer to supporting operational Starlink missions. The deal follows FCC scrutiny over EchoStar’s use of mobile-satellite spectrum. FCC officials questioned whether EchoStar fulfilled its obligations to deploy 5G in the U.S. The company expects the transaction with SpaceX and AT&T to address these concerns.
An FCC spokesperson said the EchoStar agreements could enhance competition, expand services for millions of Americans, and strengthen U.S. leadership in next-generation connectivity. The deal underscores the Federal spectrum impact on U.S. satellite and wireless markets.
SpaceX will pay $8.5 billion in cash and issue up to $8.5 billion in stock. The company will also cover about $2 billion in interest payments on EchoStar’s debt through 2027. After the sale, EchoStar will continue operating its satellite television service, streaming platform Sling, Hughes internet service, and Boost Mobile brand.
This deal allows SpaceX to operate Starlink direct-to-cell services on owned frequencies instead of leasing from carriers like T-Mobile. Analysts say the transaction highlights the Federal spectrum impact on next-generation satellite services in the U.S.
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