SpaceX secures valuable spectrum through a $17 billion agreement with Echostar, enabling the expansion of its connectivity services. This deal comes after Echostar's previous spectrum transactions, positioning SpaceX to enhance its cellular capabilities significantly.
The FCC approves the deal to bolster competition and innovation in the wireless industry
Echostar, following the sale of a substantial portion of its spectrum to AT&T, finalized a deal with SpaceX for additional airwaves worth $17 billion. The agreement involves a cash payment of $8.5 billion and $8.5 billion in SpaceX shares. This strategic move will also involve SpaceX taking over Echostar's debt interest payments until late 2027.
SpaceX's Starlink satellite service on a phone. | Image credit-T-Mobile
The agreement also allows Boost Mobile subscribers, under Echostar's ownership, access to SpaceX's direct-to-cell service, Starlink. This service ensures connectivity even in areas with no cellular signal, with SpaceX aiming to expand its cellular capabilities by over 100 times with the acquired spectrum. SpaceX's President and COO, Gwynne Shotwell, anticipates ending mobile dead zones globally through this spectrum acquisition.
Following the deal, Echostar's stock price surged, while competitors like T-Mobile and AT&T experienced declines. SpaceX envisions developing next-generation satellites for improved performance and coverage, enhancing its position in the wireless industry.
