EchoStar Sells Spectrum Licenses to SpaceX for $17B

In its second megadeal in the past two weeks, EchoStar continued the divestment of its inventory of unused licenses with a $17 billion cash-and-stock agreement with Elon Musk’s SpaceX involving EchoStar’s AWS-4 and H-block spectrum licenses.

The terms of the agreement include a cash payment of $8.5 billion and $8.5 billion in SpaceX stock. The deal also includes an unspecified long-term commercial arrangement that would enable EchoStar’s Boost Mobile subscribers — through its cloud-native 5G core — to access SpaceX’s next generation Starlink “Direct to Cell” service. The service eliminates “dead space” connectivity problems in cellular services by linking directly to satellites instead of terrestrial cell towers. In addition, SpaceX has agreed to provide another $2 billion to pay interest on EchoStar debt through November 2027.