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FCC to End EchoStar 5G Probe After $40 Billion in Spectrum Deals with SpaceX and AT&T

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The U.S. Federal Communications Commission (FCC) will close its investigation into EchoStar’s 5G buildout obligations, following the company’s recent spectrum sales to SpaceX and AT&T worth a combined $40 billion.

FCC’s decision

  • FCC Chair Brendan Carr said in a letter to EchoStar Chair Charles Ergen that the agency would conclude EchoStar has met its 5G obligations.

  • Carr called the outcome a “potential game changer” for American consumers, freeing up spectrum and injecting new competition into the wireless market.

  • EchoStar’s Boost Mobile brand, which lost 2 million customers in recent years, had been seen as providing limited competitive pressure.

Spectrum sales

  • $17B deal with SpaceX: Enables Starlink Direct-to-Cell services with upgraded satellites.

  • $23B deal with AT&T: Provides AT&T with 50 MHz of nationwide mid- and low-band spectrum.

Background

  • EchoStar was under probe for slow 5G deployment and potential “warehousing” of spectrum.

  • SpaceX had previously pressed the FCC to review EchoStar’s holdings.

  • The FCC’s move confirms EchoStar’s exclusive rights to key spectrum blocks for ground and satellite use.

Political backdrop

  • In June, President Donald Trump encouraged EchoStar and the FCC to resolve disputes over its wireless spectrum licenses.

  • The transactions with SpaceX and AT&T still require final FCC approval.

Industry impact

Carr said the deals could reshape the wireless market:

“The status quo wasn’t working. We have a chance now to do something different … this is much more competitive.”

SpaceX Buys EchoStar Spectrum in $17 Billion Deal to Expand Starlink’s 5G Reach

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SpaceX announced Monday that it will purchase wireless spectrum licenses from EchoStar for about $17 billion, a move designed to accelerate Starlink’s expansion into the 5G mobile connectivity business. The deal also allows EchoStar’s Boost Mobile subscribers to access Starlink’s direct-to-cell satellite service, extending coverage to underserved regions.

The acquisition gives SpaceX exclusive rights to critical mid-band spectrum, enabling it to build upgraded, laser-linked Starlink satellites that could expand network capacity by over 100 times. “With exclusive spectrum, SpaceX will develop next-generation Starlink Direct to Cell satellites… to end mobile dead zones around the world,” said SpaceX President Gwynne Shotwell.

The deal boosted EchoStar’s shares by 19%, while U.S. carriers AT&T, T-Mobile and Verizon fell 2–3% amid investor concerns over heightened competition. Americans’ mobile data usage surged 35% in 2024 to a record 132 trillion MB, underscoring the need for expanded capacity.

Since 2020, SpaceX has launched more than 8,000 Starlink satellites, with about 600 “cell towers in space” deployed in 2024 alone for direct-to-cell services. Its giant Starship rocket, now in advanced testing, will play a key role in launching the next generation of larger satellites, with operational missions expected in 2026.

The FCC, which had questioned EchoStar’s spectrum obligations, welcomed the SpaceX deal, calling it an opportunity to “supercharge competition” and extend connectivity. EchoStar recently sold $23 billion in spectrum licenses to AT&T, and the SpaceX transaction is expected to resolve regulatory inquiries.

The purchase structure includes $8.5 billion in cash, $8.5 billion in SpaceX stock, and $2 billion in debt interest coverage. EchoStar will continue to operate its Dish TV, Sling, Hughes internet service and Boost Mobile brands.

The deal marks a major win for Elon Musk’s push to control spectrum for Starlink, shifting from leasing agreements with carriers like T-Mobile to operating on frequencies SpaceX owns outright.

Klarna to Launch $40/Month Unlimited 5G Mobile Plan in U.S. as It Expands Telecom Offerings

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Swedish fintech Klarna announced on Wednesday its entry into the U.S. mobile services market with a $40 per month unlimited mobile plan offering unlimited 5G calls and data. The move marks Klarna’s effort to diversify beyond financial services and follow the trend of fintech companies entering the telecom space, alongside competitors like British firm Revolut.

Klarna will provide its mobile plan using the platform of U.S. startup Gigs, which operates as a mobile virtual network operator (MVNO) platform in partnership with AT&T. This enables Klarna to offer mobile services without owning network infrastructure.

With over 25 million U.S. users, Klarna views the mobile plan as a natural extension of its neobank ambitions. CEO Sebastian Siemiatkowski told Reuters that the company’s goal is to solve everyday problems, and mobile fits into this strategy.

Unlike most fintechs that launch mobile services in other countries before entering the U.S., Klarna is starting directly in its largest market. The company plans to expand the mobile offering to the UK, Germany, and other countries later this year.

Industry analysts predict significant disruption in the MVNO market over the next two years as more enterprises launch their own mobile services, though increased competition also brings higher risks of failure. The U.S. MVNO market is expected to grow from $14.83 billion in 2025 to $20.84 billion by 2030, according to Mordor Intelligence.

The fintech sector is increasingly seeing telecom services as a growth area, with other fintech firms such as Germany’s N26 and Brazil’s Nubank already offering mobile plans in various countries. Even outside the fintech world, investors like actor Ryan Reynolds and businesses linked to former U.S. President Donald Trump have entered the MVNO market.