In a surprising turn of events, EchoStar has finalized a deal to sell its AWS-3 spectrum licenses to SpaceX for an estimated $2.6 billion in stock. This transaction raised eyebrows as the market had anticipated a sale to Verizon at a potentially higher valuation. However, it clarified that SpaceX would acquire frequencies not targeted by Verizon.
Upon regulatory approval, SpaceX will gain access to nationwide licenses in the 1695-1710 MHz uplink band, bolstering its plans for direct-to-device services. “This transaction with SpaceX, along with our other spectrum transactions, enhances our ability to explore new business opportunities,” said Hamid Akhavan, CEO of EchoStar Capital.
Previously, EchoStar initiated a spectrum sale strategy, offloading 3.45 GHz and 600 MHz spectrum to AT&T for $23 billion, followed by a sale of AWS-4 and H-block spectrum to SpaceX—a move perceived as a response to FCC’s concerns about EchoStar’s underutilized spectrum.
These sales align with EchoStar’s compliance with regulatory expectations and eliminate unused uplink frequencies, following AT&T’s deal committing Boost Mobile to shift towards a mobile virtual network operator (MVNO) model. However, speculation surrounds SpaceX utilizing these licenses to extend its reach in the cellular market.
The combination of spectrum licenses from EchoStar with SpaceX’s satellite technology can massively enhance connectivity solutions for both consumer and enterprise markets.
Rumors about SpaceX positioning itself as a serious contender in the US mobile landscape have persisted. Roger Entner from Recon Analytics mentioned on X: “We know that Elon Musk is fascinated with the idea of being an MVNO or even taking a step further.” Perhaps this transaction is one step in that direction.
This development is significant as it could potentially catalyze the presence of SpaceX in the mobile market, further intensifying competition and innovation in the sector.
