What a wild past 30 days it’s been for satellite internet and communications provider EchoStar. After spending years trading about as flat as the state of Nebraska, the stock suddenly found its legs and started sprinting like prime Usain Bolt. And today it’s running even faster (up 16%) thanks to Elon Musk, who decided to swoop in his SpaceX rocketship and cut a $17 billion deal that both secures him prime spectrum and yanks EchoStar out of the regulatory doghouse.

The deal involves $8.5 billion in cash, $8.5 billion in SpaceX stock, plus Musk agreeing to shoulder around $2 billion of EchoStar’s debt interest through 2027. For a company that was one FCC letter away from losing its spectrum licenses (and probably careening into bankruptcy) this is the best case scenario you could ever imagine.

The reason this matters so much comes down to spectrum, which is beachfront property in the wireless world. Everyone wants it, no one’s making more of it, and EchoStar was sitting on a prime piece. The problem though was that they weren’t really using it. The FCC had been circling like sharks for months, openly questioning whether EchoStar was meeting its obligations to actually deploy a 5G network with it. When you’re $25 billion in debt and skipping $500 million in interest payments, that’s not the kind of extra attention you want.

(Source: CNBC)

So Charlie Ergen (EchoStar’s founder) started unloading assets. First, $23 billion worth of spectrum went to AT&T in August, which calmed things down temporarily. But the SpaceX deal is what puts EchoStar back on the map. Suddenly the debt looks manageable, regulators are off their back, and the company gets to keep Dish TV, Sling, Hughes, and Boost Mobile in play. (Not exactly growth engines, but at least they’re not being sold for parts.)

For SpaceX, though, this is where the story gets exciting. Starlink already has 6 million users, but Musk’s real obsession is “direct-to-cell”... satellite internet straight into your phone without leaning on For SpaceX, this is where sh*t actually gets exciting. Starlink already has 6 million users scattered around the globe, but Musk’s bigger obsession is “direct-to-cell”... satellite internet that beams straight into customer’s phones without having to kiss the ring of AT&T, Verizon, or T-Mobile.

Up until now, SpaceX was mooching off T-Mobile’s spectrum like Cousin Eddie showing up uninvited in Christmas Vacation. But with EchoStar’s AWS-4 and H-block licenses, they suddenly own 50 MHz of mid-band spectrum outright. 

This gives SpaceX real independence and a direct lane into the wireless market they’ve been trying to get into for years. Suddenly, Musk isn’t asking carriers for permission… he’s building the network on his own terms. And when Gwynne Shotwell, SpaceX’s COO, said this could “end mobile dead zones,” she wasn’t exaggerating.

Oh and if you’re a Boost Mobile user you’re gonna love this.. part of the deal also ropes in Boost Mobile customers who’ll now get access to Starlink’s direct-to-cell service. So there’s that.

EchoStar stock ripped more than 60% premarket before cooling to +16%... still a monster move for a company that hadn’t budged in four years. Its junk bonds, once circling the toilet, suddenly looked attractive again. Meanwhile, the wireless incumbents (AT&T, Verizon, and T-Mobile) all dipped about 4% because nothing ruins a Monday like Elon Musk announcing he’s moving into your lane.

At the time of publishing this article, Stocks.News holds positions in AT&T and Verizon as mentioned in the article.