Two months after announcing a $17 billion deal for spectrum, SpaceX has decided to buy another slice of radio airwaves from Boost Mobile’s parent, EchoStar.
As PCMag reports, last week EchoStar announced that it would sell its unpaired AWS-3 (Advanced Wireless Service) license for approximately $2.6 billion in exchange for SpaceX stock. The AWS-3 license covers the 1695-1710MHz radio spectrum in the US for data uploads. The deal is surprising because Verizon was also in talks to acquire the spectrum from EchoStar to help it carry 5G wireless signals, according to Bloomberg.
Instead, SpaceX swooped in to buy the spectrum, following September’s $17 billion deal to acquire exclusive use of EchoStar’s 2000–2020, 2180–2200, 1915–1920, and 1995– 2000MHz bands for the US and worldwide.
So far, SpaceX hasn’t commented on the deal. However, EchoStar is indicating that the company will utilize all the acquired spectrum, including the latest AWS-3 license, to bolster SpaceX’s cellular Starlink system, the company’s effort to use satellites to beam connectivity to consumer phones.
That system is already available through T-Mobile. But it’ll soon expand to EchoStar’s Boost Mobile as part of September’s radio spectrum deal with SpaceX. Thanks to the EchoStar spectrum, the cellular Starlink system promises a significant boost in capability, enabling it to beam even more data to phones, and making it comparable to 4G LTE, according to SpaceX. CEO Elon Musk has even floated the idea of competing with rival carriers through a standalone cellular Starlink system.
That said, SpaceX needs a few years to help the phone industry adopt the EchoStar radio bands. “Since these frequencies are not supported in current phones, the chipset has to be modified to add these frequencies. And that is probably a two-year timeframe,” Musk said in September.
In contrast, the acquired AWS-3 1695-1710MHz band is interesting because some phones, including the latest iPhones, already support it through the n70 band, which satellite industry analyst Tim Farrar pointed out. “In SpaceX hands, it gives them a lot of flexibility of combining uplink and downlink, and it gives them a lot of flexibility for where spectrum might come in the future,” added EchoStar chairman Charlie Ergen in an earnings call.
As for EchoStar, the company has been selling its radio spectrum after abandoning plans to become a major wireless carrier in the US to rival AT&T, Verizon, and T-Mobile. CEO Hamid Akhavan says the nearly $20 billion in cash and SpaceX stock from the two deals “will strengthen EchoStar’s ability to develop new business opportunities and growth in value for our shareholders.”
Ergen is also taking over as CEO of EchoStar Corporation. Meanwhile, Akhavan is moving over as CEO of the newly-formed EchoStar Capital, which will focus on investing the newly-acquired funds.
—
Photo Credit: Phil Stafford / Shutterstock.com