SpaceX has purchased EchoStar's wireless spectrum for its Starlink satellite communications for $17 billion. According to Reuters, this is a major deal that is crucial for expanding Starlink's 5G communications business.
In addition to the spectrum purchase, the two companies also signed an agreement that will give EchoStar Boost Mobile subscribers access to Starlink's Direct to Cell technology, which Ukrainian operator Kyivstar recently began testing in Ukraine.
The spectrum acquisition will allow SpaceX to begin building and deploying upgraded laser-based satellites that the company says will increase cellular network capacity by more than 100 times.
SpaceX President and COO Gwen Shotwell said the deal will help the company "end mobile dead zones around the world." She also said that with exclusive spectrum, SpaceX will be able to develop next-generation Starlink Direct to Cell satellites that will have significant performance improvements and improve coverage for customers anywhere.
The deal comes months after the U.S. Federal Communications Commission (FCC) questioned EchoStar's use of available mobile satellite spectrum, particularly whether the company is meeting its commitments to deploy 5G in the U.S.
EchoStar, for its part, hopes that the new deal with SpaceX, as well as a previous agreement with US carrier AT&T, will help resolve any FCC concerns. An FCC spokesman said both deals "have the potential to increase competition, expand innovative services for millions of Americans and strengthen the US's leadership in next-generation communications."
As we previously reported, the EchoStar spectrum will help Starlink expand its coverage area and increase the number of users the company can serve simultaneously. This agreement, in particular, plays a key role in maintaining the quality of satellite communications services, especially in remote areas.