SpaceX executed a definitive agreement to acquire the full portfolio of unpaired AWS-3 Direct to Cell Spectrum licenses from EchoStar in a transaction valued at approximately $2.6 billion in SpaceX stock. This critical acquisition immediately positions the aerospace company to advance its next-generation satellite communications architecture, particularly accelerating the development of its Starlink Direct to Cell service.
The deal significantly enhances SpaceX’s capability to deliver powerful and economical direct-to-device connectivity globally for consumer and enterprise users.
Powering Next-Generation Connectivity
The $2.6 billion stock transaction transfers nationwide AWS-3 licenses operating in the 1695-1710 MHz uplink, designated as 3GPP Band 70n, to SpaceX. The company will utilize this new bandwidth to bolster the creation of its Starlink Direct to Cell network. This latest agreement follows a related transaction from September, where SpaceX purchased EchoStar’s AWS-4 and H-block spectrum licenses for an estimated $17 billion in cash and stock.
By combining these spectrum assets with its existing satellite manufacturing and rocket launch capabilities, SpaceX significantly reduces the time required to deploy and scale comprehensive direct-to-cell service offerings. EchoStar benefits from the deal, which strengthens its ability to develop new business opportunities and increase value for its shareholders, while ensuring its existing operations, including DISH TV, Boost Mobile, Sling TV, and Hughes, remain fully unaffected.
Strategic Impact and National Security Context
The strategic use of Direct to Cell Spectrum carries significant implications for national communications infrastructure and security. The Federal Communications Commission (FCC) plays a pivotal role in managing these valuable airwaves, having previously initiated steps to update competitive bidding rules for the AWS-3 bands.
The stated goal for such spectrum management is to bring unused, 5G-grade bandwidth to the market. Furthermore, proceeds generated from the auctioning or re-allocation of spectrum, such as the AWS-3 band, actively support national security efforts like the Secure and Trusted Communications Networks Reimbursement Program.
This crucial “rip and replace” initiative aims to remove high-risk equipment manufactured by companies like Huawei and ZTE from U.S. communications networks, underscoring the vital, dual-use nature of spectrum resources in both commercial expansion and government-backed security mandates.
