EchoStar Corp. has agreed to sell spectrum licenses to AT&T Inc. for about $23 billion in a deal that will help the company stay out of bankruptcy and fend off regulatory concerns about its airwave use.
The sale will expand AT&T’s network and add about 50 megahertz of low-band and mid-band spectrum in an all-cash transaction, the Dallas telecommunications company said in a statement Tuesday. The deal is expected to close by mid-2026, pending regulatory approval.
The White House and the Federal Communications Commission were briefed about the transaction before the announcement, according to multiple people familiar with the discussions who asked to not be identified because the talks were private. America’s leadership in wireless services has a been a priority for President Trump, according to a White House official, who said the president believes this deal will accelerate the use of the wireless spectrum.
“We appreciate the productive and ongoing discussions with the EchoStar team,” FCC spokesperson Katie Gorscak said in a statement. “The FCC will continue to focus on ensuring the beneficial use of scarce spectrum resources.”
EchoStar shares jumped as much as 85% to hit the highest level on record after the announcement. AT&T shares were largely unchanged. Bonds in the broader EchoStar universe rallied. Dish DBS bonds due 2029 soared as much as 12 cents on the dollar to 83 cents and were the biggest gainers in the U.S. junk bond market, according to Trace pricing data. Trading in AT&T bonds was more than 10 times the average for this time of day.
The purchase price is $9 billion more than EchoStar paid for the spectrum and $5 billion more than the appraised value used in securitizing the assets, New Street Research’s Philip Burnett said in a research note Tuesday. Though $1.5 billion shy of New Street’s valuation, he said, the sale price was “nevertheless a great mark on value.”
Federal regulators have been pushing EchoStar to sell some of its airwaves after concerns it had failed to put valuable slices of wireless spectrum to use, Bloomberg reported in July. The FCC launched an investigation in May into whether EchoStar was meeting its obligations for its wireless and satellite spectrum rights. The company skipped bond payments and considered filing for bankruptcy, saying the investigation had stymied its ability to make decisions about its 5G network.
In a June meeting, first reported by Bloomberg, Trump urged EchoStar Chairman Charlie Ergen and FCC Chairman Brendan Carr to cut a deal to resolve the dispute. EchoStar shopped the assets to other would-be buyers, including Elon Musk’s Starlink, Bloomberg earlier reported.
AT&T said the acquisition of about 30 MHz of mid-band spectrum and 20 MHz of low-band spectrum will strengthen the company’s ability to deliver 5G and fiber services across the U.S. EchoStar will operate in the U.S. market as a hybrid mobile network operator under its Boost brand, the company said in the statement. AT&T will be its primary network partner for wireless service.
In a separate news release, Ergen called the sale and related agreement to work with AT&T “critical steps toward resolving the FCC’s spectrum utilization concerns.”
The U.S. Justice Department’s Antitrust Division said in a statement posted on X that it has been working with the FCC and other parties for several months on the EchoStar matter and would review the transaction.
On a conference call with investors Tuesday, AT&T Chief Executive John Stankey said regulators shouldn’t be concerned that the transaction was putting too much wireless spectrum in the hands of the largest telecom carriers.
“The dynamics of what’s occurring in the market support the fact that concentration really isn’t an issue,” Stankey said. “Getting more capacity out into the market is ultimately a good thing for consumers over the long haul.”
AT&T has been spending heavily to expand its fiber-optic network across the country and previously said it would use cash savings from Trump’s tax and spending bill to accelerate those plans. In May, it agreed to buy the consumer fiber operations of Lumen Technologies Inc. for $5.75 billion, expanding its fast broadband service in major cities such as Denver and Las Vegas.
The company intends to finance the EchoStar deal with a combination of cash on hand and borrowings. AT&T maintained its earlier projections for as much as $20 billion for share repurchases through 2027. Jefferies Financial Group Inc. advised AT&T on the EchoStar acquisition.
EchoStar had $5 billion of cash on its balance sheet and subsequently committed to resuming bond payments including interest on the defaulted amounts. Its bond prices signaled that creditors weren’t expecting big losses even against the implied threat of a bankruptcy, which may have provided a fast way to get a federal judge to mediate a process that could otherwise drag on.
Solon, Griffis and Dlouhy write for Bloomberg.