Starlink, owned by Elon Musk's SpaceX, is in talks to buy wireless spectrum from EchoStar Corp. According to sources familiar with the matter, a deal could be announced as early as this week, Bloomberg reports.
The deal will cover frequencies designated for satellite communications, known as Advanced Wireless Services (AWS-4), by the U.S. Federal Communications Commission (FCC). The price will be approximately $17 billion in cash and stock. Details are still being finalized, and the talks could end without a deal.
An EchoStar representative declined to comment. A Starlink spokesperson for Elon Musk did not immediately respond to a request for comment outside of normal business hours.
Earlier this year, the FCC launched an investigation into whether EchoStar was fulfilling its obligations regarding wireless and satellite spectrum rights. The regulator has designated the AWS-4 or 2 GHz band for terrestrial mobile transmissions, as well as traffic between satellites and ground infrastructure. The investigation began after SpaceX complained that EchoStar was not using its spectrum reserves.
In July, federal regulators began demanding that EchoStar sell some of its spectrum. The company missed debt payments and even considered bankruptcy, saying the investigation had hindered its decision-making about its 5G network. And in August, EchoStar agreed to sell spectrum licenses to AT&T for about $23 billion.
Starlink satellites use specific frequency bands to send and receive data from users on the ground, and these frequencies play a critical role in delivering internet services. By acquiring the EchoStar spectrum, Starlink will be able to expand its coverage area and increase the number of users it can serve simultaneously. This is key to maintaining quality of service, especially in remote areas.