EchoStar sells spectrum to SpaceX; quits LEO plan
September 8, 2025
By Chris Forrester
It seems that Charlie Ergen and EchoStar have decided to trim – if not exit – the satellite direct-to-consumer market. It is selling its AWS-4 and H-Block licences (c. 50MHz of spectrum) to SpaceX for $17 billion (€14.5bn), with up to $8.5 billion in cash and $8.5 billion in Starlink equity. SpaceX will also assume $2 billion of interest payments due between now and up to November 2027. The SpaceX stock is valued at $212 per share.
In connection with the transaction, SpaceX and EchoStar will enter into a long-term commercial agreement, which will enable EchoStar’s Boost Mobile subscribers – through its cloud-native 5G core – to access SpaceX’s next generation 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,” commented Hamid Akhavan, president & CEO, EchoStar. “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 realise the direct-to-cell vision in a more innovative, economical and faster way for consumers worldwide.
“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,” added 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.”
The deal also gets the FCC off from EchoStar’s back. “The proceeds of this transaction will be used for, among other things, retiring certain debt obligations and funding EchoStar’s continued operations and growth initiatives. Current operations of EchoStar’s DISH TV, Sling and Hughes will not be impacted by this transaction,” said an EchoStar statement.
EchoStar will also transfer some international licences and enter into a referral agreement that lets their existing satellite broadband customers to be referred to Starlink in exchange for a fee. Boost Mobile (EchoStar’s terrestrial cellular wireless business) customers will also eventually be able to connect to the Starlink satellite network. EchoStar will also shelve their own plans to build a LEO satellite constellation, and the company has pulled out of its $1.3 billion contract with Canada’s MDA Space which was building its fleet of 100+ Direct-to-Device LEO satellites.
Analysts from investment bank BNP-Paribas, in their flash note to clients, said: “This was not wholly unexpected post the EchoStar spectrum divestment to AT&T in August. On one hand this all but affirms EchoStar’s retreat from being a 4th facilities-based carrier in the US, and the break-up of their spectrum portfolio amongst multiple parties also makes the emergence of a credible 4th player much less likely, in our view, which is a positive for the wireless industry. Still, this deal is likely to raise some initial concern that perhaps Starlink could become that 4th carrier over time. We continue to see Starlink’s direct to device (D2D) ambitions as complementary to the telecoms terrestrial wireless offers rather than substitutive. Starlink does provide a more credible substitutive threat on the home broadband side with their satellite offering that uses different spectrum, which remains a marginal competitive threat to cable, Fixed Wireless Access and Fiber.”
The bank adds that in its view Starlink is likely to not only envisage charging more to T-Mobile for using this newly acquired spectrum but must presumably harbor some ambition that this deal can get Verizon and / or AT&T to jump ship (from AST SpaceMobile) and reach an agreement with them.