SpaceX Agrees to Buy Wireless Airwaves

SpaceX has agreed to pay $17 billion for the Rights to use some of EchoStar’s valuable Spectrum for Cellphone Service.

EchoStar said Monday that SpaceX agreed to pay $8.5 billion in Cash and up to $8.5 billion of its Stock for Two Chunks of Wireless Spectrum. The Rocket and Satellite-Internet Company also agreed to pay about $2 billion toward Interest Payments on EchoStar Debt through November 2027.

The Elon Musk-led SpaceX is already a Growing Home Broadband Provider through its Starlink Business and has Dipped into the Mobile-Phone Sector through a U.S. Partnership with T-Mobile. But the New Spectrum Rights would Significantly Improve Starlink’s ability to Connect with Cellphones in Remote areas out of Cellphone Towers’ reach. Two License Blocks that SpaceX is Buying, include the Rights to provide Ground-based 5G Cellphone and Broadband Service.

SpaceX could use the Licenses as the Foundation for a New Cellphone Service that it Operates, or it could Share Spectrum with Telecom Partners. T-Mobile is in talks to Lease some of the Spectrum Rights that SpaceX plans to Acquire.

EchoStar’s latest Spectrum Deals are in response to Pressure from the Federal Communications Commission (FCC), which Threatened in May to Strip some of its Valuable Spectrum Rights. FCC Chairman Brendan Carr (R) said in a Letter to EchoStar, that it wasn’t Effectively Competing with the Big Three Wireless Carriers using the Wireless Licenses at its Ddisposal. The Threat prompted a whirlwind of Deal Talks with Multiple Telecom and Satellite Companies, including AT&T and Verizon.

AT&T was the First Spectrum Buyer, out of the gate, with an Agreement to spend about $23 billion to buy other Chunks of Cellphone Spectrum Rights from EchoStar, to Improve its Traditional Cellphone Service from the Ground. The Dallas Telecom Giant’s Chief Executive, John Stankey, called the Deal “an opportunistic and pre-emptive asset acquisition.”

IEchoStar said Monday, it expects the New SpaceX Deal and the Earlier Spectrum Sale will Resolve the FCC’s inquiries. It plans to use Proceeds from the Deal to Retire Debt and Fund Operations.

Shares in EchoStar Surged around 21% in Premarket Trading. If those Gains Hold, Shares would have more than Tripled in Value in recent weeks.










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