SpaceX has reached an agreement to acquire wireless spectrum from EchoStar in a transaction valued at approximately $17 billion in cash and stock. The acquisition provides SpaceX’s Starlink satellite network with the spectrum for its “Direct to Cell” service, while offering EchoStar a major financial reprieve. The deal also includes a commercial partnership allowing EchoStar’s Boost Mobile customers to access Starlink’s service.
With the agreement, EchoStar’s AWS-4 and H-block spectrum licenses will be transferred to SpaceX. These frequencies occupy portions of the radio spectrum particularly suited for mobile satellite services, enabling direct connectivity to standard cellular devices. For more than a decade, EchoStar, under telecommunications veteran Charlie Ergen, held these licenses with the intent of deploying a proprietary direct-to-device satellite network. Regulatory delays and financial pressures, however, limited the company’s ability to develop the spectrum fully. EchoStar’s long-term debt exceeds $26 billion, and the Federal Communications Commission (FCC) had opened an inquiry earlier this year regarding the company’s compliance with build-out obligations, under the agency’s “use it or lose it” policy designed to ensure public benefit from valuable spectrum.
Historically, satellite mobile services have depended on terrestrial networks for last-mile connectivity or spectrum access. With SpaceX’s expanded spectrum holdings, the company can challenge terrestrial operators by offering direct-to-cell 5G connectivity from space to unmodified phones globally. For SpaceX, the acquisition strengthens its position in the emerging satellite-to-phone market. While Starlink had previously partnered with T-Mobile to offer initial direct-to-cell services, exclusive access to AWS-4 and H-block spectrum allows the company to operate independently and expand its offerings. The new frequencies will likely to facilitate the deployment of next-generation Starlink satellites capable of providing full 5G connectivity to unmodified mobile phones. By securing exclusive AWS-4 and H-block frequencies, SpaceX can operate independently of carrier partnerships like T-Mobile, reduce interference risks, and expand global coverage into remote or underserved regions.
EchoStar itself sold other spectrum licenses to AT&T for $23 billion in August, while competitors like AST SpaceMobile and Lynk have also been working on satellite-to-phone tech but face challenges scaling service and securing spectrum licenses that enable direct mobile device connectivity without terrestrial towers. With both deals, the company brings in a total of $40 billion. Proceeds from these transactions are expected to reduce EchoStar’s debt and address missed bond payments, while also satisfying FCC inquiries regarding spectrum utilization.
“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,” Gwynne Shotwell, president & COO of SpaceX, commented on the matter. “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. In this next chapter, with exclusive spectrum, 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.”
The satellite-to-phone market itself is an emerging segment with significant revenue potential. Industry forecasts estimate the global satellite mobile connectivity market could reach tens of billions of dollars in annual revenue within the next decade, driven by growing demand for ubiquitous, reliable mobile internet and cell service in remote areas. However, the market faces adoption challenges including technological complexity in delivering low-latency, high-throughput service from space, device compatibility, regulatory approval processes, and competition from expanding 5G terrestrial networks. SpaceX’s ability to leverage its vast Starlink constellation along with exclusive mid-band spectrum uniquely positions it to overcome some of these hurdles and capitalize on a rapidly growing market opportunity.