Just when it seemed like the wireless industry had settled down, another massive EchoStar deal shakes everything up.
This time, EchoStar announced it’s selling crucial wireless spectrum to SpaceX (Starlink) for $17 billion—and this isn’t just another business transaction. It’s a move that could fundamentally reshape how your cell phone connects to the world.
Think of wireless spectrum as invisible highways in the sky that carry your calls, texts, and data. Different companies own different “lanes” on these highways. EchoStar just sold some of the most valuable lanes to Elon Musk’s satellite internet company, and these lanes have off-ramps to satellites!
The Money Behind the Deal
The numbers here are staggering, but let’s break them down in simple terms.
- $8.5 billion in cash
- $8.5 billion in SpaceX stock
- $2 billion in EchoStar debt that SpaceX will help cover over the next few years
Here’s why this is remarkable: EchoStar’s 2Q 2025 books valued these wireless licenses at around $3.6 billion. They just sold them for $17 billion.
That’s like buying a house for $100,000 and selling it for $470,000—a massive win for EchoStar’s chairman, Charlie Ergen.
Another way to look at it: Imagine wireless spectrum as beachfront property. The price per “lot” ($ per MHz-Pop) jumped from 23 cents to $1.10—nearly five times more valuable than before.
And now Ergen is not just cashing out—he’s also becoming one of the biggest investors in SpaceX, one of the most powerful satellite companies in the world. Billionaires really do make strange bedfellows.
What EchoStar Actually Sold
The H-Block: A Decade-Long Bet
Back in 2013, the government auctioned a nationwide slice of spectrum called the H-block—a band that covered the entire U.S. Sprint was supposed to be the buyer, but they never showed. Charlie Ergen stepped in, bid the minimum $1.6 billion, and walked away with the entire thing. He’s been holding onto it for over a decade, waiting for the right moment.
AWS-4: A Special Kind of License
The other piece of the deal is AWS-4 spectrum—special licenses that support “mobile satellite services” (MSS). In plain English, that means these frequencies can be used to connect satellites and devices on the ground.
That’s incredibly valuable for SpaceX, which is already partnering with T-Mobile to connect phones directly to satellites. Ergen originally bought these licenses from two failed companies for about $2 billion, and they’ve long been considered his most valuable holdings.
Why This Deal Matters to You
Better Coverage in Remote Areas
When you drive through rural areas or go camping, you’ve probably lost cell service. That’s because building towers in places with few people is incredibly expensive. Companies have to run fiber for miles, bring in electricity, and maintain equipment, sometimes just to serve a few hundred customers.
SpaceX wants to change that. Instead of building towers everywhere, their idea is for your phone to connect directly to satellites when you’re off the grid. Think of it as having a cell tower in space that can cover massive areas without ground infrastructure.
Seamless Connectivity, Anywhere
In the future, your phone might work like this:
- At home → connects to Wi-Fi
- Outside → connects to the nearest tower
- Hiking in the mountains → connects automatically to a SpaceX satellite
The transition would be seamless, and you wouldn’t even notice. Your phone would just work everywhere.
I’m not going to comment about unique satellite-only capabilities. It stands to reason that there could be some very cool and unique features potentially available in the future. Those capabilities could possibly work anywhere, not just hard-to-reach areas. This could generate a lot of new revenue we’re not even talking about yet!
The Technical Reality Check
Before you get too excited, here’s the catch: most phones today can’t use these frequencies yet. It’s like EchoStar just sold SpaceX a set of radio stations, but most radios can’t tune into those channels.
The H-Block requires a new band class.
The AWS-4 spectrum only has one band class (Band 23), which was never widely adopted in devices and does not have a 5G equivalent.
Getting these into handsets typically takes at least two years. That’s why Elon Musk said it will take time to make this work. It’s like when we transitioned from 3G to 4G to 5G—it doesn’t happen overnight.
The Bigger Picture: What This Changes
Rural Internet Gets More Competitive
The U.S. government has been planning to spend about $9 billion for rural cell coverage through the 5G Mobility Fund. With this spectrum, SpaceX could ostensibly bid to deliver that service via satellites, likely cheaper than traditional cell towers. There are no specific plans released on the Mobility Fund at the moment, but he’s in a catbird seat if there ever was one.
Traditional Wireless Companies Face New Rivals
AT&T, Verizon, and T-Mobile have spent hundreds of billions on nationwide cell tower networks. Now they face competition from satellites. For T-Mobile, which is already partnering with SpaceX, this might be a good thing. But for AT&T and Verizon? They may need to double down on partnerships with AST (their satellite partner) by leasing more spectrum to them to keep up (but that comes at a cost to terrestrial service). This is starting to set up some interesting game theory scenarios.
Cell Tower Economics Shift
This event does not mean cell towers will disappear. Cities and suburbs will always need towers, and satellites can’t handle the data demand of dense areas. But in rural regions, where towers are expensive and sometimes lightly used, satellites may become the smarter choice. That has serious ramifications for middle-mile transport and cell site backhaul providers.
What’s Still in EchoStar’s Toolbox
Even after this deal, EchoStar isn’t out of spectrum. Ergen still owns valuable wireless licenses:
- More spectrum in AWS-3 that many expect Verizon to buy
- Other bands across different parts of the “wireless highway”, including nearly 20 MHz nationwide of CBRS, and that pesky 700E block
- Millimeter wave spectrum
This sale comes just weeks after EchoStar’s $23 billion spectrum deal with AT&T. It’s like Ergen is running a massive garage sale of wireless assets.
What Happens Next
Charlie Ergen has spent decades buying spectrum and has often been criticized for not building networks fast enough. This deal shows a different strategy: rather than building expensive networks, he’s cashing out and taking equity in companies like SpaceX that will deploy the technology.
For SpaceX, it’s not just about spectrum. It’s about regulatory approval for a new kind of network that blends space and terrestrial communications.
The deal still needs government approval, but if it goes through, we may be on the verge of the biggest shift yet in how cell networks are built and funded. Why build towers if satellites can do the job in many areas?
The Bottom Line
This $17 billion deal is about preparing for a future where your phone works everywhere—from downtown Manhattan to the middle of Death Valley—without you ever thinking about whether it’s a tower or a satellite.
It may take years to fully get there, but the foundation is being laid right now. And with EchoStar, one thing is certain: the next move is never far away.
Can’t wait to see what the next two weeks hold!