Charlie Ergen’s EchoStar saw its stock head skyward after unveiling plans to sell spectrum licenses to AT&T for $23 billion, a move that will shore up its finances and, it hopes, resolve an inquiry by the FCC.
Shares surged 80% to $54, an all-time high.
The agency led by Brendar Carr, which needs to approve the deal, is currently pursuing an inquiry around EchoStar’s spectrum use.
The operations of EchoStar’s other businesses, including DISH TV, Sling and Hughes, will not be impacted by the transaction, the company said.
Specifically, the deal calls for a sale of EchoStar’s 3.45 GHz and 600 MHz spectrum licenses — a total of 50 MHz of nationwide spectrum — to the telecom giant. In addition, the two companies amended their network services agreement to create a hybrid mobile network operator relationship.
“EchoStar and Boost Mobile have met all of the FCC’s network buildout milestones. However, this spectrum sale to AT&T and hybrid MNO agreement are critical steps toward resolving the FCC’s spectrum utilization concerns,” Ergen said.
Ergen’s Dish Network acquired Boost Mobile in 2020 as a government-imposed remedy — as Boost parent T-Mobile merged with Sprint — to create a fourth national wireless carrier.
EchoStar has struggled financially and has been challenged in growing the service, prompting FCC concerns around the company’s build-out obligations. Elon Musk has weighed in, saying the FCC should let his SpaceX use the spectrum if EchoStar wasn’t.
The license sale to AT&T will enable rapid deployment of the purchased spectrum to U.S. consumers across the country, as AT&T has the option to lease the spectrum pending the close, EchoStar said.
“This transaction puts our business on a solid financial path, further facilitating EchoStar’s long-term success, and enhancing our ability to innovate and compete as a hybrid network operator. The proceeds of this transaction will be used for, among other things, retiring certain debt obligations and funding EchoStar’s continued operations and growth initiatives,” added Hamid Akhavan, CEO and president, EchoStar. “We continue to evaluate strategic opportunities for our remaining spectrum portfolio in partnership with the U.S. government and wireless industry participants.”
