SpaceX Spends $17 Billion to Acquire Spectrum from EchoStar, Expands Starlink Direct-to-Mobile Service

Staff Reporter | PNN:
SpaceX has recently completed a major deal to acquire a large wireless spectrum from EchoStar. The total value of the deal is $17 billion, with $8.5 billion paid in cash and another $8.5 billion in SpaceX shares. With this new spectrum acquisition, SpaceX will be able to provide its Starlink satellite-to-phone service directly to users.

Spectrum refers to a limited resource of radio frequencies used for phone calls, texts, GPS, and satellite communications. The United States Federal Communications Commission (FCC) divides the spectrum into various bands and coordinates its use to prevent interference among users.

In 2024, the FCC approved a new regulatory framework called Supplemental Coverage from Space (SCS), which allows satellite operators to partner with terrestrial networks to use phone spectrum. This framework paved the way for SpaceX’s deal with EchoStar. SpaceX will now become a licensed operator capable of delivering direct mobile services via satellite.

Although SpaceX is skilled in building rockets and satellites, reaching customers has traditionally depended on hardware manufacturers and mobile network operators. However, CEO Elon Musk has plans to potentially manufacture his own phones in the future through X and xAI.

Analysts suggest that SpaceX’s move may be a strategy to encourage Apple to collaborate with SpaceX rather than Globalstar. Previously, SpaceX has also been involved in disputes with DISH and Quip regarding spectrum sharing and annual licensing rules.

This acquisition strengthens SpaceX’s position in the spectrum arena and sets the stage for expanding dominance in the satellite-based mobile service market.