EchoStar Advances Spectrum Sale to SpaceX with Regulatory Approval
EchoStar has received regulatory approval for its spectrum sale to SpaceX, an agreement valued at over $17 billion. This approval, announced on October 3, indicates that EchoStar has fulfilled the necessary requirements to retain rights to the global S-band spectrum.
Key Developments in the Spectrum Sale
The approval stems from the successful operation of the Lyra-4 satellite, launched by Rocket Lab in June. The satellite has functioned in low Earth orbit for more than 90 days, completing the International Telecommunication Union’s (ITU) “Bringing Back Into Use” (BBIU) process. This process ensures that other operators using overlapping frequencies must coordinate with EchoStar.
- Date of Regulatory Approval: October 3
- Value of Sale: Over $17 billion
- Launch of Lyra-4: June 2023
- Duration of Operation Before Approval: 90 days
With this spectrum, SpaceX plans to enhance its direct-to-device (D2D) services, potentially increasing throughput by 20 times. Recently, the company sought regulatory permission to deploy up to 15,000 upgraded D2D satellites as part of its Starlink broadband constellation. Testing of these services is expected to commence late next year.
Current Starlink Operations
Currently, over 650 Starlink satellites are operational, providing essential D2D services focused primarily on text messaging, emergency alerts, and specific applications in the United States, New Zealand, and Japan.
Financial Aspects of the Deal
As part of the agreement, SpaceX will compensate EchoStar with a combination of company stock and cash. The total value includes $2 billion earmarked for cash interest payments related to EchoStar’s debt. The deal was initially announced on September 8 and awaits further approval from the U.S. Federal Communications Commission (FCC).
Background of EchoStar’s S-Band Spectrum Strategy
This spectrum sale marks an important chapter in EchoStar’s ongoing strategy to establish its international S-band presence. The company initially began this approach in 2013 after acquiring Solaris, an Irish company struggling to leverage spectrum rights in Europe. In 2019, EchoStar expanded its portfolio by purchasing Helios Wire, a Canadian startup focused on creating a satellite network for Internet of Things (IoT) connectivity.
Despite past challenges, including propulsion issues with earlier satellite launches, the successful deployment of the Lyra-4 marks a significant turning point. The recent advancements in EchoStar’s satellite constellation and regulatory approvals represent a concerted effort to secure its position in the competitive telecommunications market.
