Tag: Echostar

EchoStar sells spectrum licenses to SpaceX for $17 billion while buying into Starlink

9:05 am

EchoStar today announced it has sold two of its spectrum licenses to SpaceX for $17 billion, in a deal that will also allow EchoStar’s customers to access Starlink.

EchoStar has entered into a definitive agreement with SpaceX to sell the company’s AWS-4 and H-block spectrum licenses for approximately $17 billion, consisting of up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock valued as of the entry into the definitive agreement. Additionally, the definitive agreement provides for SpaceX to fund an aggregate of approximately $2 billion of cash interest payments payable on EchoStar debt through November of 2027.

In connection with the transaction, SpaceX and EchoStar will enter into a long-term commercial agreement, which will enable EchoStar’s Boost Mobile subscribers – through its cloud-native 5G core – to access SpaceX’s next generation Starlink Direct to Cell service.

Essentially, in exchange for the spectrum EchoStar is investing in SpaceX.

EchoStar also today canceled a contract it had signed in early August with the satellite company MDA to build its own 100 satellite constellation designed to provide direct-to-cellphone service, competing with Starlink and AST SpaceMobile. EchoStar will no longer build a rival constellation.

Wall Street apparently liked this deal, as EchoStar’s stock value quickly rose about 19%. It also appears the deal resolves questions the FCC had raised about EchoStar recent activities.

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Echostar issues contract to build satellites for direct-to-phone constellation

1:19 pm

Echostar has awarded the satellite company MDA Space a $1.3 billion contract to build the first 100 satellites in its proposed direct-to-phone constellation that will compete directly with the constellations of SpaceX’s Starlink and AST SpaceMobile.

The initial contract, valued at approximately US$1.3 billion (approx. C$1.8 billion), includes the design, manufacturing and testing of over 100 software-defined MDA AURORA™ D2D satellites. With contract options, enabling a full initial configuration of a network of over 200 satellites, the value of the contract would increase to an approximate total value of US$2.5 billion (approx. C$3.5 billion). EchoStar envisions future growth to thousands of satellites, as demand requires, to provide global talk, text and broadband services directly to standard 5G handheld devices.

The constellation will be fully compliant with the newly created NTN and 3GPP standards, allowing EchoStar to provide messaging, voice, broadband data, and video services upon launch to all phones configured to this standard, without modifications. Additionally, the constellation will connect to an array of sensor and mobile vehicles.

All three constellations are designed to provide cell service in areas where there are no cell towers. The satellites themselves become the cell towers, in orbit.

Since most people today access the internet via their smartphones, I can see these direct-to-phone constellations eventually becoming the prime method for accessing the web. Why have a separate provider for your web services when these constellations can give you that as well as phone service. It is for this reason I suspect Echostar is jumping on the bandwagon.

This move also suggests the older Starlink and Kuiper constellations, that only provide web service, are going to eventually get superseded. For Starlink this isn’t really a threat, as it is already beginning the transition to this new technology and can likely shift its millions of customers to it easily when the time comes. For Amazon’s Kuiper constellation, however, it appears it might be arriving too late in the game.

More proof that in capitalism speed is essential. Amazon has simply moved too slowly in launching its constellation.

Hat tip Btb’s stringer Jay.

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Dish and Echostar to merge

9:15 am

The communications satellite company Echostar is now merging with the direct broadcast company Dish. From the press release:

The transaction combines DISH Network’s satellite technology, streaming services and nationwide 5G network with EchoStar’s premier satellite communications solutions, creating a global leader in terrestrial and non-terrestrial wireless connectivity. Both companies have strong momentum, highlighted by DISH’s 5G wireless network that now covers more than 70 percent of the U.S. with full commercialization underway and the successful launch of EchoStar’s JUPITER 3 satellite with significant available capacity for converged terrestrial and non-terrestrial services. The combined company will be well-positioned to deliver a broad set of communication and content distribution capabilities, accelerating the delivery of satellite and wireless connectivity solutions desired by customers.

This merger is I think part of the consolidation that is going on among the older players in the communications satellite industry as they struggle to deal with the competition from the new satellites constellations of Starlink and OneWeb.

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