• SpaceX announces a $17 billion deal with EchoStar to acquire spectrum licenses.
• The agreement is expected to enhance Starlink's mobile service capabilities.
• EchoStar shares surged nearly 23% upon the announcement as regulatory concerns ease.
• SpaceX will pay $8.5 billion in cash and $8.5 billion in stock, with additional debt payments.
• The deal assists EchoStar in resolving FCC inquiries regarding its 5G service obligations.

SpaceX, led by Elon Musk, has finalized a significant deal to acquire wireless spectrum licenses from EchoStar for approximately $17 billion. This agreement aims to bolster SpaceX's Starlink satellite network by allowing it to enhance its mobile service offerings to regular cell phone users globally. The terms of the deal include payments of up to $8.5 billion in cash and an equal amount in stock, along with about $2 billion in interest payments on EchoStar's existing debts through late 2027, according to Indiatimes and Reuters.

The spectrum being acquired includes EchoStar’s AWS-4 and H-block licenses, essential for developing advanced satellite-to-cell service capabilities. Gwynne Shotwell, SpaceX's President and COO, emphasized that this acquisition will help the company "end mobile dead zones around the world," enabling them to roll out next-generation Starlink Direct-to-Cell services. This service will initially benefit EchoStar’s Boost Mobile subscribers, allowing them to access mobile communication without needing specially-equipped devices, as reported by LA Times and Reuters.

This deal is seen as a pivotal move to resolve the Federal Communications Commission's ongoing inquiries into EchoStar's underutilization of its mobile-satellite spectrum. The FCC had previously raised concerns about whether EchoStar was meeting its obligations regarding the deployment of 5G services, which has pushed the company to seek more lucrative arrangements. Both the SpaceX and a recent $23 billion spectrum deal with AT&T are expected to satisfy the FCC's regulatory concerns, providing EchoStar with the financial flexibility to manage its operations, according to Al Jazeera and LA Times.

Following the announcement of this deal, EchoStar’s shares saw a substantial increase, rising nearly 23% in premarket trading. The transaction is expected to enable SpaceX to significantly expand Starlink’s capabilities, allowing for an increase in its mobile network capacity by "more than 100 times." SpaceX has rapidly expanded its Starlink satellite constellation, launching over 8,000 satellites since 2020 to meet growing demand from various sectors, including consumers and military operations, as noted by Reuters and LA Times.