SpaceX Buys Spectrum from EchoStar for $17 Billion

EchoStar, a premier provider of technology, networking services, television entertainment and connectivity, has entered into an agreement with Elon Musk’s SpaceX to sell the company’s AWS-4 and H-block spectrum licenses for approximately $17 billion, consisting of up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock valued as of the entry into the agreement.

Additionally, the agreement provides for SpaceX to fund an aggregate of approximately $2 billion of cash interest payments payable on EchoStar debt through November of 2027.

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.

EchoStar President and CEO Hamid Akhavan said that 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.

“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,” Hamid said.

Advancing SpaceX’s Mission

SpaceX President and Chief Operating Officer Gwynne Shotwell said that this transaction with EchoStar will advance their mission to end mobile dead zones around the world.

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,” Gwynne added.

EchoStar anticipates this transaction with SpaceX along with the previously announced spectrum sale will resolve the Federal Communications Commission’s (FCC) inquiries. Closing of the proposed transaction will occur after all required regulatory approvals are received and other closing conditions are satisfied.

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.