EchoStar is selling its AWS-4 and H-block spectrum licenses for approximately $17 billion to SpaceX, the company announced today. Space X will pay about half of the amount in cash and the remainder in company stock under the agreement, which also provides for SpaceX to fund an aggregate of approximately $2 billion of cash interest payments payable on EchoStar debt through November of 2027.
EchoStar plans to use the SpaceX funds to retire certain debt obligations and to fund the company’s continued operations and growth initiatives. The deal is subject to regulatory approvals.
The two companies will also enter into a long-term commercial agreement, which is designed to 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,” Hamid Akhavan, president and CEO of EchoStar, said in a prepared statement.
“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.”
The company added that current operations of its DISH TV, Sling, and Hughes will not be impacted by the transaction.
The transaction with SpaceX was the second recent deal involving EchoStar selling spectrum. In August, AT&T and EchoStar unveiled agreements that would expand the wireless spectrum licenses owned by AT&T and deepen the companies’ cooperation in the operation of EchoStar’s Boost Mobile brand.
AT&T was to acquire approximately 30 MHz of spectrum in the 3.45 GHz mid-band and approximately 20 MHz nationwide in the 600 MHz low band for about $23 billion. The all-cash transaction was said to be subject to “certain adjustments.”
