EchoStar Sells Wireless Spectrum Licenses Worth $23 Billion to AT&T, Paving Way for 5G Resolution and Boost Mobile Expansion

EchoStar Corporation’s stock surged by over 75% on Tuesday following AT&T Inc.’s announcement of an approximately $23 billion all-cash deal to acquire certain wireless spectrum licenses from the telecommunications company.

The acquisition will bolster AT&T’s network with around 50 megahertz of mid-band and low-band spectrum, covering over 400 markets across the United States. The transaction is subject to regulatory approval and is anticipated to close in the middle of 2026.

In a regulatory filing, EchoStar revealed that this transaction forms part of its ongoing endeavors to address inquiries from the Federal Communications Commission (FCC).

In a letter dated May, FCC Chairman Brendan Carr wrote to EchoStar’s Chairman and co-founder, Charlie Ergen, expressing concerns over the company’s compliance with federal requirements regarding 5G network construction. The letter followed complaints from Elon Musk’s SpaceX alleging that EchoStar had been underutilizing valuable mid-band spectrum, and suggesting that the FCC should facilitate new satellite entrants to put this spectrum to use.

SpaceX, through its Starlink initiative, provides internet services via a constellation of low Earth orbit satellites.

As part of the agreement, AT&T and EchoStar also decided to expand their network services contract, enabling EchoStar to function as a hybrid mobile network operator offering wireless services under the Boost Mobile brand.

“EchoStar and Boost Mobile have met all FCC’s network buildout milestones,” Ergen stated in a press release. “However, this spectrum sale to AT&T and the hybrid MNO agreement are crucial steps towards resolving the FCC’s spectrum utilization concerns.”

AT&T CEO John Stankey told CNBC that the deal presented a “win-win situation”.

“It’s an excellent opportunity to bring together services in a manner that customers desire,” Stankey said in an interview on “Squawk Box”. “I believe regulators will find this highly attractive.”

AT&T’s shares experienced marginal growth.