SpaceX agreed to pay $17 billion to take over a massive amount of Echostar’s wireless radio waves for Starlink’s direct service, and fired one of the biggest shots ever at Spectrum Wars.
This transaction is the most aggressive signal that SpaceX wants to dominate the satellite-to-phone market.
The importance of sales, which we see SpaceX paying a mix of $8.5 billion in cash and $8.5 billion in SpaceX stock, centers around Spectrum, a finite resource. Spectrum refers to the range of radio frequencies that carry wireless signals to everything from phones to texts to GPS and satellite communications.
The US government divides the spectrum into “bands” via the Federal Communications Commission. There are very many frequencies available and users need to adjust to avoid interference. To get even higher, only certain ranges work well on phones and satellites, further reducing the pool of available bands, creating fierce competition for access.
The FCC auctions long-term licenses to private companies at high prices. Major cellular bands were primarily accumulated by wireless carriers across the country, such as AT&T and Verizon, but incumbent satellite operators such as Iridium and Global Star had another band.
In 2024, the FCC approved a new regulatory framework called Supplementary Coverage from the Space that paved the way for satellites to legally expand carrier networks. SCS allows satellite operators to work with terrestrial airlines to fill wireless coverage gaps as secondary services using the carrier’s existing telephone spectrum. Later that year, SpaceX officially began offering services directly to T-Mobile users as a premium add-on.
The framework paved the way for SpaceX trading with Echostar. A structure has been created to allow satellite operators to tap on the ground network. And now, with Echostar’s deal, SpaceX does not need to partner with Spectrum’s ground licensees. SpaceX has become a license holder rather than relying on relationships with other companies.
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Of course, SpaceX is involved in the business of building rockets and satellites rather than mobile phones, so it relies on hardware manufacturers and carriers to reach hundreds of millions of consumers. However, SpaceX CEO Elon Musk came up with the idea of making a phone under other businesses that merged with Xai earlier this year. Mask aims to continue collaboration with Apple’s Openai, particularly Apple’s. In August, X and Xai filed a lawsuit against the two companies, alleging anti-competitive practices.
Apple satellite features such as emergency SOS have been enabled through a partnership with Canadian Firm GlobalStar, with Apple committing more than $1.5 billion to further expand its satellite-enabled iPhone services. However, some analysts are wondering whether SpaceX’s move is being used to convince Apple to work with SpaceX instead of GlobalStar.
This is not the first time SpaceX has flexed muscles with Spectrum Wars.
The company has been successful in fighting over the years with cooking (a subsidiary of Echostar) in the 12 GHz band SpaceX wants to use for Starlink. It has also been reinforced by the lack of use of Dish/Echostar’s AWS-4 band.
Separately, SpaceX and Kuiper refrain from FCC filing on how satellite megaconstellation, which compete with interference rules, shares the spectrum.
They were also the main forces driving the FCC to revisit the satellite spectrum sharing rules. Earlier this year, the committee began creating formal rules to modernize satellite sharing restrictions after a petition from SpaceX.
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