EchoStar to Sell Spectrum Licenses to AT&T for $23 Billion

EchoStar has agreed to sell its 3.45 GHz and 600 MHz spectrum licenses to AT&T for approximately $23 billion, subject to regulatory approval. The sale will enable AT&T to rapidly deploy the spectrum to U.S. consumers. Boost Mobile will continue to compete in the U.S. wireless market as a hybrid MNO, using EchoStar's cloud-native 5G core and AT&T's cell sites. The transaction is part of EchoStar's efforts to resolve FCC inquiries.

EchoStar (NASDAQ: SATS) has agreed to sell its 3.45 GHz and 600 MHz spectrum licenses to AT&T (NYSE: T) for approximately $23 billion, subject to regulatory approval. The sale, announced on August 26, 2025, will enable AT&T to rapidly deploy the spectrum to U.S. consumers [4].

Boost Mobile, a subsidiary of EchoStar, will continue to compete in the U.S. wireless market as a hybrid mobile network operator (MNO), using EchoStar's cloud-native 5G core and AT&T's cell sites. This arrangement aims to address the Federal Communications Commission's (FCC) spectrum utilization concerns while ensuring uninterrupted service for Boost Mobile subscribers [2].

The transaction is part of EchoStar's ongoing efforts to resolve the FCC's inquiries. 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 closing of the spectrum sale [4].

The deal is expected to be accretive to AT&T's adjusted earnings per share (EPS) and free cash flow in the third year following closing. AT&T maintains its 2025 financial guidance and plans for $20 billion in share repurchases during 2025-2027. The company expects its net debt-to-adjusted EBITDA ratio to temporarily increase to 3x, with plans to return to its 2.5x target within approximately three years [3].

EchoStar's $23 billion spectrum sale represents a transformative transaction, addressing several critical challenges facing the company. The deal offloads 50 MHz of nationwide spectrum to AT&T while establishing a hybrid MNO model for Boost Mobile that leverages AT&T's infrastructure. This structure allows EchoStar to maintain its competitive position in the wireless market without the capital-intensive burden of full network ownership [2].

The transaction elegantly resolves the FCC's spectrum utilization concerns, which had become a significant regulatory overhang for EchoStar. By transferring spectrum to AT&T—an operator with established network capacity and deployment capabilities—the deal ensures these valuable frequency assets will be put to effective use serving American consumers [2].

Financially, this infusion of $23 billion dramatically strengthens EchoStar's balance sheet, with management specifically highlighting debt reduction as a priority use of proceeds. This debt relief, combined with the reduced capital expenditure requirements of the hybrid operator model, significantly improves the company's financial trajectory and operational flexibility [2].

The hybrid MNO structure represents an innovative middle ground between traditional facilities-based carriers and MVNOs. By maintaining its cloud-native 5G core while utilizing AT&T's radio access network, Boost can offer differentiated services while substantially reducing network maintenance costs. The agreement also preserves T-Mobile network access as a redundancy layer, ensuring service continuity for customers [2].

With core EchoStar businesses like DISH TV, Sling, and Hughes remaining unaffected, this transaction effectively compartmentalizes the company's wireless challenges while preserving its other revenue streams. The company's statement about evaluating options for its remaining spectrum assets suggests potential for additional strategic transactions that could further reshape its business model and balance sheet [2].

References:
[1] https://www.investing.com/news/stock-market-news/att-to-buy-spectrum-licenses-from-echostar-93CH-4210542
[2] https://www.stocktitan.net/news/SATS/echo-star-announces-spectrum-sale-and-hybrid-mobile-network-operator-gvn35d2jxbz5.html
[3] https://www.stocktitan.net/news/T/at-t-to-acquire-spectrum-licenses-from-echo-bpryvz9jm3sp.html
[4] https://www.prnewswire.com/news-releases/echostar-announces-spectrum-sale-and-hybrid-mobile-network-operator-mno-agreement-steps-toward-resolving-federal-communications-commissions-fcc-inquiries-302538317.html