SpaceX spends $17B to acquire EchoStar spectrum licenses
SpaceX Strikes $17 Billion Deal with EchoStar for Spectrum Licenses
Elon Musk’s SpaceX has finalized a deal worth approximately $17 billion with Englewood-based EchoStar for spectrum licenses to enhance its Starlink satellite network.
The agreement includes EchoStar’s AWS-4 and H-block spectrum licenses, with SpaceX offering up to $8.5 billion in cash and $8.5 billion in stock. Additionally, SpaceX will make cash interest payments of around $2 billion on EchoStar debt until November 2027.
As part of the deal, SpaceX and EchoStar will establish a long-term commercial agreement that will enable Boost Mobile subscribers of EchoStar to access SpaceX’s advanced Starlink Direct to Cell service.
Following the announcement, shares of EchoStar saw a 19% surge before the market opened on Monday.
Just last month, AT&T revealed plans to acquire wireless spectrum licenses from EchoStar for $23 billion, significantly expanding its low- and mid-band coverage networks.
EchoStar expects that the recent deals with AT&T and SpaceX will address concerns raised by the Federal Communications Commission regarding the deployment of 5G technology in the U.S.
The FCC had initiated inquiries into EchoStar’s use of spectrum and efforts to promote 5G accessibility in communities, leading to calls for hearings on the matter.
Following the agreement, EchoStar intends to use the proceeds to reduce debt, ensuring that operations of Dish TV, Sling, and Hughes remain unaffected.
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