EchoStar Corporation (NASDAQ:SATS) announced on Monday that it would sell its AWS-4 and H-block spectrum licenses for approximately $17 billion to Elon Musk’s SpaceX.
The deal consideration consists of up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock valued as of the entry into the definitive agreement.
Additionally, the definitive agreement provides for SpaceX to fund an aggregate of approximately $2 billion of cash interest payments payable on EchoStar debt through November of 2027.
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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,” said Hamid Akhavan, president and 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 realize 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,” said Gwynne Shotwell, president and COO, SpaceX.
EchoStar anticipates that this transaction with SpaceX, along with the previously announced spectrum sale, will resolve the Federal Communications Commission’s (FCC) inquiries.
In August, AT&T Inc. (NYSE:T) revealed plans to purchase EchoStar’s spectrum licenses worth $23 billion in an all-cash transaction. The move aims to bolster AT&T’s wireless and fiber network capacity while positioning the company as a long-term leader in advanced connectivity across the U.S.
EchoStar will use the transaction proceeds of the SpaceX deal to retire certain debt obligations and fund the company’s continued operations and growth initiatives. The transaction will not impact the current operations of EchoStar’s DISH TV, Sling, and Hughes.
For SpaceX, the acquisition deepens its ability to deliver satellite-based connectivity at scale. Elon Musk has previously argued that direct-to-cell services will play a critical role in reshaping global communications.
In June, Elon Musk rejected a report valuing SpaceX at $480 billion, saying it was “too high” given the company’s current stage.
He forecasted SpaceX’s revenue would surpass NASA’s $18.8 billion fiscal 2026 budget, which the Trump administration had notably cut.
Price Action: SATS stock is trading higher by 24.24% to $83.53 premarket at last check Monday.
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