Elon Musk's SpaceX has made a monumental leap towards global mobile connectivity, securing a staggering $17 billion deal with EchoStar. This acquisition grants SpaceX access to 50 MHz of prime wireless spectrum and mobile satellite service licenses, crucial for powering Starlink's ambitious "Direct to Cell" initiative.
The deal, a combination of $8.5 billion in cash and an equal amount in SpaceX stock, includes EchoStar's valuable AWS-4 and H-block spectrum licenses. This strategic move allows SpaceX to significantly reduce its reliance on third-party network providers, paving the way for independent and potentially faster global mobile broadband access. A significant portion of the cash payment – $2 billion – will go towards settling EchoStar's existing debt.
This acquisition follows SpaceX's successful acquisition of FCC approval to launch a direct-to-phone Starlink service, with T-Mobile initially slated as a partner. However, with this spectrum purchase, SpaceX gains far greater operational autonomy, a decisive advantage in rolling out its revolutionary technology. SpaceX intends to leverage this new spectrum to implement "optimized 5G protocols" once its next generation of satellites is operational, promising a substantial improvement in service capabilities. Existing Boost Mobile customers will also benefit from access to Starlink's direct-to-phone service.
The deal’s genesis is rooted in pressure from the FCC, which launched an inquiry into EchoStar's spectrum usage following encouragement from SpaceX. Reports suggest even President Trump urged EchoStar CEO Charlie Ergen to sell. This acquisition, following EchoStar’s recent $23 billion spectrum sale to AT&T, appears to resolve the FCC's concerns, according to EchoStar's official statement.
The agreement effectively ends EchoStar's plans to develop its own direct-to-device satellite constellation. Concurrently, EchoStar canceled a $1.3 billion contract with MDA Space for 100 satellites, a testament to the seismic shift in the satellite communications landscape. SpaceX boasts that the newly acquired spectrum will empower the development of upgraded satellites with over 100 times the capacity of its initial direct-to-cell satellites. This massive investment signals SpaceX's unwavering commitment to delivering truly global, high-speed internet access directly to mobile devices.
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Originally published at: https://techcrunch.com/2025/09/08/spacex-strikes-17b-deal-to-buy-echostars-spectrum-for-starlinks-direct-to-phone-service/
