SpaceX acquires EchoStar’s AWS-4 and H-block spectrum licenses for approximately $17 billion

SpaceX yesterday officially announced that the company has entered into a purchase agreement with EchoStar for 50 MHz of exclusive S-band spectrum in the US (known as AWS-4 and PCS-H) as well as global Mobile Satellite Service (MSS) spectrum licenses.

The acquisition was done for approximately $17 billion, consisting of up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock valued as of the entry into the definitive agreement. Additionally, the definitive agreement provides for SpaceX to fund an aggregate of approximately $2 billion of cash interest payments payable on EchoStar debt through November 2027.

This agreement will enable SpaceX to develop and deploy its next-generation Starlink Direct to Cell constellation, which will be capable of providing broadband service to cell phones globally.

“We’re so pleased to be doing this transaction with EchoStar as it will advance our mission to end mobile dead zones around the world,” said Gwynne Shotwell, president & COO, SpaceX. “SpaceX’s first generation Starlink satellites with Direct to Cell capabilities have already connected millions of people when they needed it most – during natural disasters so they could contact emergency responders and loved ones – or when they would have previously been off the grid. In this next chapter, with exclusive spectrum, SpaceX will 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.”

It is revealed that the next generation of Starlink Direct to Cell satellites will be designed to fully utilize this spectrum. Driven by custom SpaceX-designed silicon and phased array antennas, the satellites will support thousands of spatial beams and higher bandwidth capability, enabling around 20x the throughout capability as compared to a first-generation satellite.

With the world’s most advanced phased arrays, the wider bandwidth operations enabled by this spectrum purchase, and optimized 5 protocols, the system is said to support an overall capacity increase of more than 100x the first-generation Starlink Direct to Cell system.