TLDR
- EchoStar selling AWS-3 spectrum licenses to SpaceX for $2.6 billion in equity
- Transaction builds on September’s $17 billion spectrum deal between companies
- Spectrum covers 1695-1710 MHz range for mobile and satellite communications
- SpaceX plans to use licenses for Starlink Direct to Cell network
- Deal requires regulatory approval before closing
EchoStar Corporation is selling its nationwide AWS-3 spectrum licenses to SpaceX for roughly $2.6 billion in stock. The announcement came Thursday morning from the company’s Englewood, Colorado headquarters.
This marks the second spectrum transaction between EchoStar and SpaceX in two months. The companies previously announced a $17 billion deal in September involving different wireless assets.
The AWS-3 licenses cover the 1695-1710 MHz uplink frequency range. These airwaves operate within 3GPP Band 70n specifications and work across the entire United States.
SpaceX will combine these newly acquired licenses with the AWS-4 and H-block spectrum it purchased earlier. The goal is building out the Starlink Direct to Cell constellation.
SpaceX Starlink Plans
The space company is developing satellite technology that connects directly to standard mobile phones. Users won’t need special equipment or modifications to their devices.
The spectrum licenses give SpaceX legal authority to use specific radio frequencies. These frequencies enable two-way communication between orbiting satellites and phones on the ground.
Starlink Direct to Cell could provide coverage in remote areas where traditional cell towers don’t exist. The service expands beyond SpaceX’s current satellite internet offerings.
EchoStar Financial Position
EchoStar currently holds a market capitalization of $20.8 billion. The company also carries more than $30 billion in total debt.
Despite profitability challenges over the past year, EchoStar stock has jumped 202% in the last six months. The spectrum sales appear to be part of a strategy to improve the company’s financial position.
CEO Hamid Akhavan from EchoStar Capital said the deal will help develop new business opportunities. He expects the transaction to create shareholder value going forward.
The company receives SpaceX equity rather than cash payment. This gives EchoStar ownership stake in the privately held space venture.
What Happens Next
The transaction needs regulatory approval from federal authorities. Other standard closing conditions must also be satisfied before finalization.
Neither company provided a specific timeline for completion. These types of spectrum transfers typically require Federal Communications Commission review.
EchoStar assured customers that current services remain unaffected. DISH TV, Sling TV, Boost Mobile, and Hughes operations will continue as normal during and after the sale.
The deal represents continued consolidation of wireless spectrum assets in SpaceX’s hands. The company keeps adding infrastructure pieces needed for its telecommunications expansion.
EchoStar maintains its other spectrum holdings and wireless operations. The AWS-3 sale focuses specifically on frequencies that align with SpaceX’s satellite communication needs.
The September agreement already transferred substantial spectrum assets between the companies. This $2.6 billion transaction adds another layer to that existing relationship.
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