[Jeff Foust] EchoStar sells spectrum to SpaceX, cancels MDA satellite contract

Jeff Foust

~4 minutes

WASHINGTON — EchoStar has abandoned its plans to create a direct-to-device satellite constellation in low Earth orbit, selling spectrum to SpaceX while canceling a brand-new contract with MDA Space.

EchoStar announced Sept. 8 it reached an agreement to sell the rights to its AWS-4 and H-block spectrum to SpaceX for $17 billion, evenly split between cash and SpaceX stock. SpaceX will also make about $2 billion in cash interest payments on EchoStar debt through November 2027.

As part of the deal, customers of Boost Mobile, EchoStar’s terrestrial wireless service, will gain access to Starlink direct-to-cell services.

The S-band spectrum sale marks the end of EchoStar’s efforts to use that spectrum for its own direct-to-device service. That effort appeared to be buoyed by an Aug. 26 deal where EchoStar sold terrestrial wireless spectrum to AT&T for $23 billion. Analysts expected EchoStar to use some of the proceeds of the deal to fund development of that satellite constellation, estimated to cost $5 billion.

EchoStar awarded MDA Space a contract worth $1.3 billion Aug. 1 for 100 satellites, to be delivered by 2028. The contract included a $1.2 billion option for an additional 100 satellites.

MDA Space, in a separate announcement Sept. 8, said it received a notice from EchoStar that it was terminating that contract, citing “a sudden change to EchoStar’s business strategy” and the sale of spectrum to SpaceX. MDA said it will provide more details in a conference call later in the day.

EchoStar and SpaceX had sparred for months about the spectrum transferred in the deal. SpaceX, in filings with the Federal Communications Commission, alleged that EchoStar was not making proper use of the spectrum, prompting an investigation by the commission.

EchoStar argued in a statement that selling the spectrum made better business sense than trying to build its own constellation.

“This transaction with SpaceX continues our legacy of putting the customer first as it allows for the combination of AWS-4 and H-block spectrum from EchoStar with the rocket launch and satellite capabilities from SpaceX to realize the direct-to-cell vision in a more innovative, economical and faster way for consumers worldwide,” said Hamid Akhavan, president and chief executive of EchoStar.

The transaction is one of the biggest ever for SpaceX, which has rarely acquired companies or made large deals like this. Gwynne Shotwell, president of SpaceX, said the new spectrum will support next-generation Starlink direct-to-device services.

“In this next chapter, with exclusive spectrum, SpaceX will develop next-generation Starlink Direct to Cell satellites, which will have a step change in performance and enable us to enhance coverage for customers wherever they are in the world,” she said in the statement.

September 8, 2025

THE FUTURE OF STARLINK DIRECT TO CELL

SpaceX has entered into a purchase agreement with EchoStar for 50 MHz of exclusive S-band spectrum in the US as well as global Mobile Satellite Service (MSS) spectrum licenses. This agreement will enable us to develop and deploy our next generation Starlink Direct to Cell constellation which will be capable of providing broadband service to cell phones globally.

In January 2024, SpaceX began deploying Starlink satellites with Direct to Cell capabilities to eliminate mobile dead zones. At the time, more than 20 percent of the land area across the United States and 90 percent of the Earth remained uncovered by terrestrial service.

Days after launching the first Direct to Cell satellites in 2024, the Starlink team was texting using unmodified cell phones on the ground. By spring, we were demonstrating video calling capabilities. A year and half later, and with more than 600 Starlink Direct to Cell satellites in orbit, the first-generation Direct to Cell constellation was successfully deployed and is operational across five continents. Today, Starlink Direct to Cell has become the largest 4G coverage provider on planet Earth, connecting over six million users and counting.

The Direct to Cell constellation connects to the broader Starlink constellation (consisting of more than 8,000 satellites) through the Starlink laser mesh, which enables coverage anywhere in the world. Operating at 360 kilometers above the surface of the Earth, Direct to Cell satellites fly lower than any other constellation in order to optimize the link between the cell phone and satellite. Building the constellation to its present form with its unique regenerative architecture involved designing, manufacturing, launching and operating cell towers in space, including development of the system's eNodeB payload, phased array antennas, and core network, which enables network integration similar to a standard roaming partner. The service works with existing LTE phones wherever you can see the sky – no changes to hardware, firmware, or special apps are required.

At the same time, the Starlink team has been working with leading device manufacturers and application developers to enhance the services provided over the satellite network. In addition to basic and multimedia messaging, customers on the Starlink Direct to Cell network now have access to apps ranging from social media and messaging platforms like X and WhatsApp to navigation and outdoor essentials like Google Maps, AllTrails, and AccuWeather. Starlink Direct to Cell is also enabling Internet of Things (IoT) connections in remote areas.

These capabilities have been developed in partnership with Mobile Network Operators, including T-Mobile in the United States, Optus and Telstra in Australia, Rogers in Canada, One New Zealand in New Zealand, KDDI in Japan, Salt in Switzerland, Entel in Chile and Peru, and Kyivstar in Ukraine (as well as several more unannounced partnerships) to connect millions of people around the world in places that have never had cellular connectivity before, and even during emergencies when terrestrial systems are impacted.

Following hurricanes, severe flooding and wildfires in the United States, Starlink Direct to Cell powered life-saving connectivity. In those events alone, more than 1.5 million people were able to communicate with Direct to Cell service when terrestrial networks were down, millions of SMS messages were sent and received, and hundreds of Wireless Emergency Alerts that otherwise would not have been received were successfully delivered.

Additionally, people outside of terrestrial cellular network coverage have been able to receive assistance from emergency services when they previously would not. In New Zealand, a woman who came upon a car crash that happened in a cellular dead zone was able to text her partner the location of the accident through a Starlink Direct to Cell connection, and first responders were on the scene within minutes of the text being sent.

While we have made progress to help end mobile dead zones, our work is just beginning. More than 50 percent of the world’s land mass remains uncovered by terrestrial services. To that end, as we develop and deploy the next generation Direct to Cell constellation, we remain committed to working with mobile network operators globally to continue delivering ubiquitous coverage to as many customers as possible.

Through the agreement with EchoStar, SpaceX will purchase EchoStar’s 50 MHz S-band spectrum in the US (bands known as AWS-4 and PCS-H) as well as its global MSS spectrum licenses. Exclusive access to this spectrum, along with use of optimized 5G protocols designed for satellite connectivity, will enable a step change in performance for Starlink Direct to Cell.

The next generation of Starlink Direct to Cell satellites will be designed to fully utilize this spectrum. Driven by custom SpaceX-designed silicon and phased array antennas, the satellites will support thousands of spatial beams and higher bandwidth capability, enabling around 20x the throughput capability as compared to a first-generation satellite. With the world’s most advanced phased arrays, the wider bandwidth operations enabled by this spectrum purchase, and optimized 5G protocols, the system will support an overall capacity increase of more than 100x the first generation Starlink Direct to Cell system. In most environments, this will enable full 5G cellular connectivity with a comparable experience to current terrestrial LTE service, which will be used in partnership with Mobile Network Operators to augment high capacity terrestrial 5G networks.

Combined with new state-of-the-art satellite technologies, exclusive spectrum, and Starship’s unprecedented payload capacity to low-Earth orbit in a single launch, Starlink Direct to Cell’s next generation service will deliver unparalleled performance to standard, unmodified cell phones and IoT devices – helping to close coverage gaps and ultimately eliminate mobile dead zones around the world.