By Mary Prenon
EchoStar, a global technology, networking, and TV entertainment firm, has forged a $1.7 billion agreement with SpaceX, a worldwide space technology firm, to sell its AWS-4 and H-block spectrum licenses.
A spectrum license is a legal authorization from the Federal Communications Commission (FCC) or other governmental agency that allows a company to have exclusive rights to use a specific band of radio frequencies for a designated amount of time and geographic region. Spectrum licenses prevent interference and ensure operations.
The deal will comprise up to $8.5 billion in cash and another $8.5 billion in SpaceX stock with the value calculated at the time of the agreement signing. In addition, the agreement allows for SpaceX to fund a total of about $2 billion in cash interest payments, which will be payable on EchoStar debt through November 2027.
Shares of EchoStar surged by nearly 15 percent as of 1:30 p.m. ET on Sept. 8.
In a Sept. 8 statement, EchoStar noted that in addition to resolving an FCC probe, another long-term commercial agreement deal will enable EchoStar’s Boost Mobile subscribers to access SpaceX’s next generational Starlink Direct to Cell service.
“For the past decade, we’ve acquired spectrum and facilitated worldwide 5G spectrum standards and devices, all with the foresight that direct-to-cell connectivity via satellite would change the way the world communicates,” Hamid Akhavan, president and CEO of EchoStar, said in the statement.
“This transaction with SpaceX continues our legacy of putting the customer first as it allows for the combination of AWS-4 and H-block spectrum from EchoStar with the rocket launch and satellite capabilities from SpaceX to realize the direct-to-cell vision in a more innovative, economical, and faster way for consumers worldwide.”
Gwynne Shotwell, president and chief operating officer of SpaceX, added that the deal will advance its missions to end mobile dead zones worldwide.
“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,” she said in the statement.
During the next chapter, noted Shotwell, SpaceX will also develop next generation Starlink Direct to Cell satellites, which will enable the firm to enhance coverage for its global customers.
The agreement is expected to close after all of the required regulatory documents have been approved, as well as any other closing conditions.
EchoStar will use the proceeds from the transaction to retire debt obligations and fund its continued operations and growth.
In the United States, EchoStar offers Boost Mobile, Sling TV, DISH TV, Hughes, HugesNet, HughesON, and JUPITER brands. In Europe, the company operated under its EchoStar Mobile Limited subsidiary and in Australia, as EchoStar Global Australia. Founded in 1980, EchoStar is headquartered in Englewood, Colorado.
SpaceX was founded in 2022 to design, manufacture, and launch advanced rockets and spacecraft. As the world’s leading provider of launch services, SpaceX is also poised to deploy the world’s most advanced internet and Direct to Cell networks. Starlink’s satellites with Direct to Cell capabilities enable worldwide access to texting, calling, and browsing. Elon Musk is the largest shareholder in the privately held SpaceX.
