SpaceX gets the 2GHz AWS-4 spectrum it wanted by purchasing it from Echostar.
After selling a huge chunk of its spectrum holdings to AT&T, ending its hope of becoming the nation’s fourth facilities-based wireless carrier, Echostar sold off some more of its remaining airwaves to SpaceX. The latter, co-founded and primarily owned by Elon Musk, had accused Echostar of hoarding some of its spectrum, as did FCC Chairman Brendan Carr. Others accused Echostar of trying to profit from spectrum speculation.
Echostar, which raked in $23 billion late last month by selling 30MHz of 3.45 GHz mid-band spectrum and 20MHz of 600 MHz low-band airwaves to AT&T, announced today that it had a deal for some additional airwaves. Elon Musk’s SpaceX, which had coveted the spectrum for its direct-to-phone satellite service, will pay $17 billion for the spectrum.
When the deal closes, Echostar will receive $8.5 billion in cash and $8.5 billion in SpaceX shares, which are not publicly traded. As part of the transaction, SpaceX will cover approximately $2 billion in interest payments that Echostar owes on its debt through late 2027.
The deal also gives subscribers to Boost Mobile, which is owned by Echostar, the ability to access SpaceX’s Starlink’s direct-to-cell service, which allows smartphone users to stay connected even in areas that don’t have a cellular signal. With the additional spectrum, SpaceX will be able to expand its cellular capabilities by «more than 100 times.» SpaceX president and COO Gwynne Shotwell says that the spectrum purchase will help SpaceX «end mobile dead zones around the world.»
The deal generated some winners and losers on Wall Street.
