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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.”

Verizon’s Warning on Slow Subscriber Growth Triggers Telecom Selloff

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Verizon Communications issued a warning about “soft” wireless subscriber growth in the first quarter, citing off-season promotions by competitors that have continued despite the typically slow post-holiday period. The announcement caused Verizon’s shares to plunge more than 7% on Tuesday, sparking a broader selloff in the U.S. telecom sector.

Chief Revenue Officer Frank Boulben, speaking at Deutsche Bank’s Media, Internet & Telecom Conference, noted that Verizon pulled back on customer incentives after an aggressive December quarter, while rivals maintained their promotional strategies, intensifying competition.

AT&T shares fell 5.3% as the company also reported elevated subscriber churn in January, while T-Mobile US saw a 4% decline. Analysts point to a shrinking pool of potential new mobile subscribers in an increasingly saturated market, with broadband giants like Comcast stepping up competition by targeting wireless customers.

Verizon also flagged a “slow start” for phone upgrades in the first quarter, attributing it to economic uncertainty and a lack of major new smartphone features. However, the company reaffirmed its annual target for single-digit growth in phone upgrades and expects a stronger rebound later in the year. Verizon anticipates adding more monthly-bill paying wireless subscribers in 2025 than the 900,000 it gained in 2024, supported by its customizable myPlan offerings.

Minimal Impact from Immigration Crackdown

Verizon and AT&T downplayed concerns about potential customer losses due to tighter U.S. immigration policies. President Donald Trump’s administration has intensified immigration enforcement, raising concerns about a reduced pool of new telecom customers. However, Boulben stated that any impact would be minimal, primarily affecting the low-end prepaid market rather than postpaid contracts that require formal identification.

Limited Threat from Satellite Internet

Both Verizon and AT&T dismissed concerns over competition from satellite internet providers like SpaceX’s Starlink, emphasizing that traditional wireless services remain more reliable and cost-effective. AT&T CFO Pascal Desroches acknowledged the potential of satellite-to-cell connectivity but described it as a limited business opportunity at present.

Meanwhile, T-Mobile has announced plans to launch its satellite-to-cell service with Starlink in July, priced at $15 per month.