SpaceX's $17 Billion Deal Plunges Musk Deeper into Wireless

Elon Musk's SpaceX is writing its biggest check ever to expand its foothold in the mobile-phone business.

- Drew Fitzgerald & Micah Maidenberg

SpaceX said Monday it would pay $17 billion for the rights to use some of EchoStar's valuable spectrum for cellphone service.

The deal with EchoStar includes $8.5 billion in cash and up to $8.5 billion of SpaceX stock for two chunks of valuable U.S. wireless licenses and related domestic and international rights to beam signals from space. The rocket and satellite-internet company also agreed to pay about $2 billion of cash toward interest payments on EchoStar debt through November 2027.

SpaceX is already a growing home broadband provider through its Starlink business and has dipped into the mobile-phone sector through a U.S. partnership with T-Mobile. However, the new spectrum rights would significantly improve Starlink's ability to connect with cellphones in remote areas beyond the reach of cellphone towers.

SpaceX said it would use the spectrum as a foundation for Starlink's direct-to-cell business around the globe. It could also share spectrum with telecom partners.

The most valuable piece of the deal covers two license blocks that allow a carrier to provide ground-based 5G cellphone and broadband service in the U.S.

T-Mobile is in talks to lease some of the spectrum rights that SpaceX plans to acquire, according to people familiar with the matter.