EchoStar to Sell Spectrum Licenses to AT&T in $23 Billion Deal

The deal, announced Tuesday, is slated to close by mid-2026 pending regulatory clearance. Both the White House and the Federal Communications Commission (FCC) were briefed on the plan prior to its public unveiling, per Bloomberg. President Donald Trump has emphasized that expanding U.S. leadership in wireless services remains a key priority, with administration officials framing the agreement as a step toward faster spectrum deployment. The FCC acknowledged its ongoing discussions with EchoStar and reaffirmed its commitment to ensuring efficient use of scarce spectrum resources.

The announcement sent EchoStar’s stock soaring as much as 85%, reaching record highs, while AT&T’s shares remained relatively flat. Bond markets also reacted sharply: EchoStar-related debt rallied and Dish DBS bonds due in 2029 surged more than 12 cents on the dollar. According to Bloomberg, trading volumes in AT&T’s bonds spiked to more than 10 times their daily average.

Financial analysts have highlighted the deal’s premium price. Philip Burnett of New Street Research noted that the $23 billion figure exceeds EchoStar’s purchase cost for the spectrum by $9 billion and surpasses its appraised securitization value by $5 billion. While still shy of New Street’s internal valuation, Burnett described the sale as a strong outcome. Bloomberg previously reported that regulators had pressed EchoStar to offload some of its airwaves after concerns about underutilization, leading to an FCC probe into the company’s spectrum obligations earlier this year.

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AT&T will acquire approximately 30 MHz of mid-band spectrum and 20 MHz of low-band spectrum, strengthening its nationwide 5G and fiber offerings. EchoStar, meanwhile, plans to continue operations in the U.S. under its Boost brand, with AT&T serving as its main wireless network partner. EchoStar Chairman Charlie Ergen called the arrangement “critical steps toward resolving the FCC’s spectrum utilization concerns” in a company statement.

The Justice Department’s Antitrust Division confirmed it has been coordinating with the FCC on the matter and will review the transaction. On a call with investors, AT&T Chief Executive Officer John Stankey said he did not expect regulators to view the deal as anticompetitive, stressing that increased wireless capacity would ultimately benefit consumers.

AT&T, which has been aggressively expanding its fiber network, said it will finance the acquisition with a mix of existing cash and new borrowings. The company also reaffirmed plans to return as much as $20 billion to shareholders through buybacks by 2027. Jefferies Financial Group served as financial adviser to AT&T.

For EchoStar, the agreement provides a critical financial lifeline. The company, which had faced scrutiny for missing bond payments and weighing bankruptcy, now has $5 billion in cash on hand and has pledged to resume servicing its debt. According to Bloomberg, creditors signaled confidence in the company’s stability following the deal, with bond prices showing little expectation of heavy losses.

Source: Bloomberg