SpaceX Buys Wireless Spectrum License from EchoStar for $17 Billion to Expand Starlink 5G

With exclusive spectrum access, SpaceX plans to develop new Starlink satellites to improve service and coverage for customers everywhere.

Elon Musk’s SpaceX announced on Monday that it will buy wireless spectrum licenses from EchoStar for $17 billion. This deal will help expand Starlink’s emerging 5G connectivity services.

The two companies have made a deal where EchoStar’s Boost Mobile subscribers have access to Starlink‘s direct-to-cell services, extending satellite coverage to areas without service.

With the new spectrum, SpaceX plans to build and launch upgraded satellites connected by lasers. The company says this will boost cell network capacity by more than 100 times.

Gwynne Shotwell, SpaceX’s president and COO, said the deal will help end mobile dead zones around the world. With exclusive spectrum access, SpaceX plans to develop new Starlink satellites to improve service and coverage for customers everywhere.

This announcement caused EchoStar shares to jump by 19%, while shares of US wireless providers AT&T and T-Mobile decreased by more than 3%, and Verizon dropped by over 2%.

This move comes after an evident increase in wireless data use was seen. In 2024, Americans used 132 trillion megabytes of mobile data, a 35% increase from the previous record, according to the industry group CTIA.

Since 2020, Musk‘s company has launched more than 8,000 Starlink satellites into low Earth orbit. The network has drawn interest from the military, transportation firms, and rural customers.

Since January 2024, about 600 of these satellites, which the company calls “cell towers in space”, have been launched for the direct-to-cell network. These satellites orbit closer to Earth than other satellite groups.

The deal comes months after the Federal Communications Commission (FCC) questioned EchoStar’s use of mobile satellite service spectrum and raised concerns about its compliance with 5G development in the United States.

EchoStar stated that it expects the deals with SpaceX and AT&T will address the Federal Communications Commission’s concerns. An FCC representative stated that the deal EchoStar made with AT&T and Starlink will enable the company to dramatically increase the competition, bring innovative new services to millions of US consumers, and strengthen US leadership in next-generation connectivity.

In August, the company sold some nationwide wireless spectrum licenses to AT&T for $23 billion, with AT&T agreeing to buy 50 MHz of mid-band and low-band spectrum nationwide. US President Donald Trump had previously urged EchoStar and FCC Chair Brendan Carr to finalize a mutually beneficial agreement regarding the company’s wireless spectrum licenses.

SpaceX will pay up to $8.5 billion in cash and issue up to $8.5 billion in stock. It will also cover approximately $2 billion in interest on EchoStar’s debt through the end of 2027. After the deal, EchoStar will continue to operate its Dish TV, Sling, HughesNet internet, and Boost Mobile services.

SpaceX had been actively pressing the FCC to reallocate underutilized airwaves for satellite-to-phone service, claiming that EchoStar had not met specific conditions. In an April letter to the FCC, SpaceX argued that EchoStar’s spectrum in the 2 gigahertz band is well-suited for sharing among next-generation satellite systems and that the company has left valuable mid-band spectrum chronically underutilized.

The agreement with EchoStar will allow SpaceX to deliver Starlink direct-to-cell services on frequencies it owns, rather than depending solely on those leased from mobile carriers, such as T-Mobile. In May, the FCC approved Verizon to buy fiber-optic internet provider Frontier Communications, worth $20 billion. Verizon invested $52 billion to buy and clear key spectrum in 2021, securing 3,511 licenses, while AT&T secured $23.4 billion in licenses and T-Mobile secured $9.3 billion.

In other news, SpaceX was negotiating with the Bahamas to get permission to land its Falcon 9 rocket boosters within its territory. However, in April of this year, the Bahamas paused this deal after SpaceX’s Starship rocket exploded a month earlier due to a mid-flight failure, causing huge amounts of debris to fall onto the island.