EchoStar just announced that it reached an agreement with SpaceX. SpaceX will buy EchoStar's full portfolio of AWS-4 and H-block spectrum licenses for approximately $17 billion, which will help SpaceX develop and deploy its Starlink Direct-To-Cell constellation.
This will begin a long-term partnership between the two companies. As part of the deal, SpaceX and EchoStar will enter into a commercial agreement that gives EchoStar's Boost Mobile subscribers access to the next-generation Starlink Direct to Cell service. EchoStar's CEO, Hamid Akhavan, said the company has been acquiring spectrum for a decade with the vision that direct-to-cell connectivity via satellite would change how the world communicates.
SpaceX is just the second company to capitalize on EchoStar dropping its cellular services.AT&T recently bought some wireless spectrum from EchoStar, and now SpaceX is buying the services it specifically needs for its Direct to Cell service. EchoStar seems to have lucked out, or other companies were just waiting on this opportunity, because the deals are happening quickly.
The Starlink Direct to Cell service is already connecting millions of people during natural disasters or when they're otherwise off the grid. Gwynne Shotwell, SpaceX's President and COO, said the new, exclusive spectrum will allow SpaceX to "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." With this new spectrum, SpaceX can optimize 5G protocols in its direct-to-phone service once the new satellites are operational.
This deal also seems to be a big win for EchoStar on the regulatory front. The company has been under pressure from the Federal Communications Commission regarding the use of its spectrum holdings. The FCC had launched an inquiry into EchoStar's use of its mobile-satellite service spectrum and whether it was meeting its obligations to deploy 5G.
EchoStar stated that "this transaction with SpaceX along with the previously announced spectrum sale will resolve the Federal Communications Commission's (FCC) inquiries." It looks like the pressure from the FCC and even the constant push from SpaceX helped push this deal forward.
According to EchoStar, the proceeds from this sale are going to be used for retiring debt and funding other growth initiatives. EchoStar has also said that its current operations, including DISH TV, Sling, and Hughes, won't be impacted by this sale. This is a strategic move for the company to offload some of its assets, and it's definitely a big deal. For SpaceX, this gives it more freedom to operate and expand its direct-to-phone service without having to depend as much on other network providers like T-Mobile.
The end goal is to see the end of mobile dead zones. The previous generation of Starlink Direct to Cell satellites is already a huge help, and with this new, exclusive spectrum, SpaceX will likely make a massive leap in performance. Keep in mind that the deal still needs to get regulatory approval before it closes, but it likely will go through as a win-win for both companies and their customers.
Source:EchoStar










