EchoStar has agreed to sell SpaceX its AWS-4 and H-block spectrum licenses for about $17 billion. A move that will allow Elon Musk’s space giant to develop and deploy the next generation of Starlink Direct to Cell technology complete with 5G protocols.
The move follows the agreement EchoStar made with AT&T to buy about 50 MHz of nationwide spectrum. The move will allow AT&T to have a strong 5G and broadband offering, particularly in fixed wireless access (FWA), or cellular broadband home internet. The deal is widely seen as a move by AT&T to widen its FWA offerings.
SpaceX — The telecom?
With the purchase of the 50 MHz of S-band spectrum, SpaceX could use it to become the fourth cellular company in the U.S., which is what EchoStar originally wanted to be.
SpaceX is the largest private company on Earth with a valuation in the multiple hundreds of billions. SpaceX may be big enough to pull this off, if it wants to.
SpaceX said the agreement to buy the spectrum would allow it to develop and deploy next generation Starlink Direct to Cell constellation. This would allow the company to provide broadband service to cell phones globally.
The company started deploying Direct to Cell capabilities in January of 2024 with the goal of eliminating any mobile dead zones. SpaceX said it has already developed texting capabilities to cell phones and video calling capabilities. It currently has more than 600 Starlink Direct to Cell satellites in orbit.
SpaceX said it is now the largest 4G coverage provider on Earth and can connect with six million users. It would not be that much of a jump from providing cellular and SATCOM to consumers by selling its own service and phones.
Now a competitor?
Of course, this leads to the inevitable question: if SpaceX is now in the cellular business, does that make it a direct competitor to its partner Verizon?
While SpaceX calls itself the largest 4G provider, the spectrum includes 5G assets.
Hans Vestberg, CEO of Verizon, told Yahoo Finance that he views SpaceX now that it has the broad spectrum as a complementary company.
"They can, of course, compete in broadband to consumers,” Vestberg said. “We have many other competitors there. So, of course, I'm not naive, they can and they will compete with us in some areas, but I also see them as very complementary and adding to my opportunity to serve my customers even better.”
Earlier in 2025, Verizon and SpaceX announced a collaboration that included Verizon using SpaceX’s Starlink constellation to bolster Verizon’s satellite communications (SATCOM) features for its cellular service.
The deal would allow Verizon to offer SATCOM as an add-on to cell phone users so they would have connectivity even where mobile networks are limited or non-existent.
So, while SpaceX could be complementary as Vestberg said, it could become more of a rival and turn into something else in the future. Something to monitor moving forward.
Maybe complementary?
That said, SpaceX did suggest that it would work in partnership with mobile telecoms to augment 5G networks.
SpaceX said it plans to support thousands of spatial beams and higher bandwidth capability in the future. This will enable about 20 times the throughput capability as compared to its first-generation satellites.
This wider bandwidth that will be enabled by the spectrum purchase from EchoStar along with 5G protocols will support an increase in capacity of more than 100 times the first generation Starlink Direct to Cell system.
The company said this will enable full 5G cellular connectivity with a similar experience to current terrestrial LTE service.
Another FWA vendor?
SpaceX has long touted its internet service via satellite. Now that it has the EchoStar spectrum, the company could potentially join the race to enable FWA.
This technology has been growing rapidly and response from consumers is incredibly popular, according to a recent survey from J.D. Power.
SpaceX already provides broadband internet for countries and consumers in remote areas or areas with poor or limited broadband coverage. But if it could offer FWA as well, it could open up to even more customers.
It could use the assets from the EchoStar purchase along with Direct to Cell technology to create a hybrid that enables FWA via satellite.
EchoStar fallout
While many of these questions are open-ended, perhaps the biggest question is where EchoStar goes from here.
The company has a lot of cash now and can pay off its debt, something it said it plans to do. Additionally, the U.S. Federal Communications Commission (FCC) will terminate its investigation into EchoStar’s 5G buildout obligations.
The FCC said EchoStar had satisfied its buildout obligations after selling its spectrum to SpaceX and AT&T.
EchoStar still has the Dish TV, Boost Mobile, Sling and Hughes satellite properties. The company said it will operate as a hybrid mobile network provider through Boost Mobile.
But rumors are already swirling that EchoStar may approach DirecTV again with an offer for Dish TV. Late in 2024, DirecTV agreed to buy Dish but the two companies couldn’t finish the deal. Will the two companies get it done this time?
As part of the agreement with SpaceX, EchoStar’s Boost Mobile users will gain access to SpaceX’s next generation Starlink Direct to Cell service to enable SATCOM on smartphones.
EchoStar said the agreement will not impact operations of Dish TV, Sling and Hughes.
