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By
MICHELLE CHAPMAN
Elon Musk’s SpaceX has reached a deal worth about $17 billion
with EchoStar for spectrum licenses that it will use to beef up
its Starlink satellite network.
The deal for EchoStar’s AWS-4 and H-block spectrum licenses
includes up to $8.5 billion in cash and up to $8.5 billion in
SpaceX stock. SpaceX will make approximately $2 billion in cash
interest payments on EchoStar debt through November 2027.
SpaceX and EchoStar will enter into a long-term commercial
agreement which will allow EchoStar’s Boost Mobile subscribers
to access SpaceX’s next generation Starlink Direct to Cell
service.
Shares of EchoStar surged 19% before the market opened Monday.
Last month AT&T said that it will spend $23 billion to acquire
wireless spectrum licenses from EchoStar, a significant
expansion of its low- and mid-band coverage networks.
EchoStar said that it anticipates that the AT&T deal and the
SpaceX transaction will resolve recent inquiries from the
Federal Communications Commission about the rollout of 5G
technology in the U.S. The FCC had been calling for hearings on
whether Echostar was properly using the spectrum that it is now
selling, and its efforts to make 5G more available to
communities.
EchoStar said Monday that it will use the proceeds from the sale
partly to pay down debt. Current operations of Dish TV, Sling
and Hughes will not be impacted, the company said.
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