SpaceX to acquire EchoStar spectrum in $17B deal to boost Starlink expansion

SpaceX is about to make one of its biggest telecom moves yet. EchoStar said on Monday that it has agreed to sell wireless spectrum licenses to Elon Musk’s rocket and satellite company for roughly $17 billion, handing Starlink fresh capacity at a time when demand for satellite internet is exploding. The deal instantly lifted EchoStar’s stock nearly 22% in premarket trading.

The agreement comes after months of scrutiny from the Federal Communications Commission. Regulators had raised questions about whether EchoStar was utilizing its spectrum for the 5G buildout, and the company faced the risk of having those licenses revoked. President Donald Trump even stepped in, pressing both EchoStar and FCC Chair Brendan Carr to settle the issue.

“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, EchoStar president and CEO, said in a 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.”

This isn’t the first spectrum sale for EchoStar. In August, the company struck a $23 billion deal with AT&T, signaling it was ready to cash out part of its wireless portfolio to resolve the probe. EchoStar now states that the SpaceX transaction, combined with its earlier sale, should alleviate the FCC’s concerns.

EchoStar to Sell Spectrum Licenses to SpaceX for $17 Billion Amid FCC Pressure

The terms are as bold as they are complex. SpaceX will pay up to $8.5 billion in cash and issue up to $8.5 billion in stock, while taking responsibility for about $2 billion in EchoStar’s interest payments through late 2027.

“Under the terms of the agreement, 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,” Reuters reported.

In addition, the companies signed a long-term commercial agreement that will let EchoStar’s Boost Mobile subscribers tap into Starlink’s direct-to-cell service through EchoStar’s cloud-native 5G core—a move that could reshape mobile connectivity for customers long frustrated with patchy coverage.

“We’re so pleased to be doing this transaction with EchoStar as it will advance our mission to end mobile dead zones around the world,” said Gwynne Shotwell, president & COO, SpaceX. “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. In this next chapter, 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.”

For EchoStar, the deal removes a major cloud over its future. The FCC review was slowing its network buildout and threatening its viability as a wireless carrier, a situation made worse when the company missed about $500 million in interest payments. For SpaceX, the spectrum rights open the door to scaling Starlink’s footprint far beyond rural broadband into mobile services, cementing its position in satellite internet.

As the FCC put it, this is about making sure “scarce spectrum resources” don’t sit idle. With SpaceX stepping in, those airwaves look set to be put to use in one of the most ambitious satellite networks ever built.