## SpaceX Acquires Wireless Spectrum from EchoStar for $17 Billion to Expand Starlink's 5G Capabilities **News Title:** SpaceX buys wireless spectrum from EchoStar in $17 billion deal **Report Provider/Author:** Reuters, published by CNBC **Date/Time Period Covered:** News reported on Monday, September 8, 2025. The deal involves spectrum licenses and interest payments through late 2027. **News Identifiers:** URL: `https://www.cnbc.com/2025/09/08/echostar-to-sell-spectrum-licenses-to-spacex-for-17-billion.html` --- ### Main Findings and Conclusions Elon Musk's SpaceX has announced a significant deal to purchase wireless spectrum licenses from EchoStar for approximately **$17 billion**. This acquisition is crucial for the expansion of SpaceX's Starlink satellite network, particularly its nascent 5G connectivity business. The agreement also includes a provision for EchoStar's Boost Mobile subscribers to access Starlink's direct-to-cell service, aiming to extend satellite coverage to areas currently lacking service. The spectrum purchase will enable SpaceX to develop and deploy upgraded, laser-connected satellites that the company claims will increase the cell network's capacity by **"more than 100 times."** This move is intended to "end mobile dead zones around the world," according to Gwynne Shotwell, President and COO of SpaceX. ### Key Statistics and Metrics * **Deal Value:** Approximately **$17 billion** for wireless spectrum licenses. * **Capacity Increase:** Starlink's cell network capacity is projected to increase by **"more than 100 times"** with the new satellites. * **Mobile Data Usage (2024):** Americans used a record **132 trillion megabytes** of mobile data, a **35% increase** over the prior record. * **Starlink Satellites Launched:** Over **8,000** Starlink satellites have been launched since 2020. * **Direct-to-Cell Satellites:** Approximately **600** Starlink satellites, described as "cell towers in space," have been launched since January 2024 for the direct-to-cell network, orbiting closer to Earth. * **SpaceX Payment Structure:** Up to **$8.5 billion in cash** and up to **$8.5 billion in stock**. * **Interest Payment Coverage:** SpaceX will cover roughly **$2 billion in interest payments** on EchoStar's debt obligations through late 2027. * **EchoStar Spectrum Sale to AT&T (August 2025):** **$23 billion** for 50 MHz of nationwide mid-band and low-band spectrum. * **Verizon Spectrum Acquisition (2021):** **$52 billion** to acquire and clear key spectrum. * **Verizon Deal with Frontier Communications (May 2025):** Approved by the FCC for **$20 billion**. ### Important Recommendations (Implied) While not explicit recommendations, the deal's context suggests a strategic push by SpaceX to: * **Accelerate 5G deployment:** By securing owned spectrum, SpaceX can bypass reliance on leased spectrum from other carriers. * **Enhance global connectivity:** The direct-to-cell service aims to eliminate mobile dead zones worldwide. * **Leverage Starship:** The success of SpaceX's next-generation rocket, Starship, is crucial for deploying the larger, next-generation satellites. ### Significant Trends or Changes * **Increased Competition in Wireless Connectivity:** The deal signifies a major shift, with a satellite company directly entering the wireless spectrum market. * **Rapid Growth in Mobile Data Consumption:** The record-breaking increase in mobile data usage highlights the growing demand for robust wireless services. * **Evolution of Satellite Networks:** Starlink is moving beyond rural broadband to offer direct mobile connectivity, positioning itself as a comprehensive communication provider. * **Consolidation and Strategic Acquisitions in Telecommunications:** The deal follows other significant transactions, such as AT&T's purchase of spectrum from EchoStar and Verizon's acquisition of Frontier Communications. ### Notable Risks or Concerns * **Regulatory Scrutiny:** The deal comes after the Federal Communications Commission (FCC) questioned EchoStar's spectrum usage and compliance with 5G deployment obligations. However, EchoStar anticipates these inquiries will be resolved by the transactions with SpaceX and AT&T. * **Dependence on Starship Development:** The deployment of advanced satellites relies heavily on the successful operationalization of SpaceX's Starship rocket, which has been under development for a decade. ### Material Financial Data * **SpaceX's Acquisition Cost:** **$17 billion**. * **Payment Breakdown:** Up to **$8.5 billion cash** and up to **$8.5 billion in stock**. * **EchoStar's Debt Obligation Coverage:** SpaceX will cover approximately **$2 billion in interest payments** through late 2027. * **Previous EchoStar Sale:** **$23 billion** to AT&T for spectrum in August 2025. ### Contextual Interpretation The acquisition of wireless spectrum by SpaceX is a pivotal moment, demonstrating its ambition to become a major player not just in satellite internet but also in terrestrial mobile connectivity. The **$17 billion** price tag underscores the immense value placed on spectrum, a finite resource essential for wireless communication. The **"more than 100 times"** capacity increase highlights the transformative potential of SpaceX's next-generation satellites, which will likely incorporate advanced technologies like laser interconnectivity. This move directly challenges traditional mobile carriers by offering a solution to coverage gaps. The surge in EchoStar shares (**19%**) and the dip in U.S. wireless carriers' stocks (**AT&T down over 3%, T-Mobile down over 3%, Verizon down over 2%**) reflect the market's immediate reaction to this significant competitive shift. The **132 trillion megabytes** of mobile data consumed in 2024, a **35% jump**, emphasizes the escalating demand for data, creating a fertile ground for new connectivity solutions. SpaceX's previous allegations that EchoStar left **"valuable mid-band spectrum chronically underused"** in the 2 gigahertz band provide crucial context for the FCC's prior scrutiny and SpaceX's aggressive pursuit of this spectrum. The deal's structure, involving both cash and stock, suggests a strategic approach by SpaceX to manage its financial resources while incentivizing EchoStar. The agreement to cover EchoStar's interest payments indicates a comprehensive financial settlement. The FCC's positive outlook, stating the deals have the "potential to supercharge competition, extend innovative new services to millions of Americans, and boost U.S. leadership in next-gen connectivity," suggests regulatory approval is likely and that the move is seen as beneficial for the broader telecommunications landscape. Finally, the mention of President Donald Trump's past involvement in prodding EchoStar and the FCC Chair to reach an amicable deal suggests the significance and long-standing nature of the spectrum allocation discussions.
SpaceX buys wireless spectrum from EchoStar in $17 billion deal
Read original at CNBC →SpaceX headquarters is shown in Hawthorne, California, U.S. June 5, 2025.Daniel Cole | ReutersElon Musk's SpaceX said Monday it will buy wireless spectrum licenses from EchoStar for its Starlink satellite network for about $17 billion, a major deal crucial to expanding Starlink's nascent 5G connectivity business.
The companies also agreed to a deal that will enable EchoStar's Boost Mobile subscribers to access Starlink direct-to-cell service to extend satellite service to areas without service.The spectrum purchase allows SpaceX to start building and deploying upgraded, laser-connected satellites that the company said will expand the cell network's capacity by "more than 100 times."
Gwynne Shotwell, president and COO, SpaceX, said the deal will help the company "end mobile dead zones around the world... 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 news sent shares of EchoStar surging 19% in early trading. Shares of U.S. wireless carriers AT&T and T-Mobile were down more than 3% and Verizon was down more than 2%.The push comes amid fast-rising wireless usage. In 2024, Americans used a record 132 trillion megabytes of mobile data, up 35% over the prior all-time record, industry group CTIA said Monday.
SpaceX has launched more than 8,000 Starlink satellites since 2020, building a distributed network in low-Earth orbit which has seen demand from militaries, transportation firms and consumers in rural areas.Roughly 600 of those satellites — which SpaceX calls "cell towers in space" — have been launched since January 2024 for the company's direct-to-cell network, orbiting closer to Earth than the rest of the constellation.
Crucial to the deployment of those larger satellites is Starship, SpaceX's giant next-generation rocket, which has been under development for roughly a decade. Increasingly complex test launches have drawn the rocket closer to its first operational Starlink missions, expected early next year.The deal comes months after the Federal Communications Commission questioned EchoStar's use of mobile-satellite service spectrum and raised concerns about whether it was meeting its obligations to deploy 5G in the country.
EchoStar said it anticipates that the transaction with SpaceX and the AT&T deal will resolve the FCC's inquiries.An FCC spokesperson said the "deals that EchoStar reached with AT&T and Starlink hold the potential to supercharge competition, extend innovative new services to millions of Americans, and boost U.
S. leadership in next-gen connectivity."The company in August sold some nationwide wireless spectrum licenses to AT&T for $23 billion. AT&T agreed to acquire 50 MHz of nationwide mid-band and low-band spectrum.President Donald Trump previously prodded EchoStar and FCC Chair Brendan Carr to reach an amicable deal for the company's wireless spectrum licenses.
SpaceX will pay up to $8.5 billion in cash and issue up to $8.5 billion in stock. SpaceX has also agreed to cover roughly $2 billion in interest payments on EchoStar's debt obligations through late 2027.After the sale, EchoStar will continue operating its satellite television service Dish TV, streaming TV platform Sling, internet service Hughes and its Boost Mobile brand.
SpaceX had aggressively pressed the FCC to reallocate underused airwaves for satellite-to-phone service after alleging EchoStar failed to meet certain obligations.In a letter to the FCC in April, SpaceX said EchoStar's spectrum in the 2 gigahertz band "remains ripe for sharing among next-generation satellite systems" and that the company has left "valuable mid-band spectrum chronically underused."
The deal with EchoStar will allow SpaceX to operate Starlink direct-to-cell services on frequencies it owns, rather than relying solely on those leased from mobile carriers like T-Mobile.In May, the FCC approved Verizon's $20 billion deal to acquire fiber-optic internet provider Frontier Communications.
Verizon spent $52 billion to acquire and clear key spectrum in 2021.
