SpaceX in talks with EchoStar to buy Boost Mobile or gain access to its network; T, VZ, TMUS fall, EchoStar rises (Nov 2)
What happened
The Washington Post reported on Monday that SpaceX has been in talks for months with EchoStar about either acquiring Boost Mobile outright or gaining access to its wireless network, according to people familiar with the negotiations. Elon Musk personally met EchoStar chairman Charlie Ergen last month to discuss a potential transaction. The move would support SpaceX's plan to build Starlink Mobile, a hybrid satellite-terrestrial network combining its satellite constellation with ground-based infrastructure to challenge AT&T, Verizon, and T-Mobile as a fourth national carrier. EchoStar had about 7.38 million wireless subscribers at the end of Q2, mostly through Boost Mobile and Gen Mobile — a ready-made customer base and retail distribution network for SpaceX. SpaceX has also approached AT&T, T-Mobile, and Verizon about buying network capacity directly; all three rebuffed it, and the carriers may need to approve any Boost transfer since network-leasing agreements are usually nontransferable. Neither SpaceX nor EchoStar commented. Telecom stocks fell more than 2% each on the report while EchoStar rose roughly 4-5%.
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Start your free 14-day trialWho’s affected
- AT&T (T) — fell more than 2% on the report; could gain leverage via nontransferable network leases, but faces a new satellite-powered competitor;
- Verizon (VZ) — fell more than 2%; same competitive threat;
- T-Mobile (TMUS) — fell more than 2% (Reuters); hosts much of Boost's leased network;
- EchoStar (ECHO) — rose ~3.7-4.9% on the news; Boost's 7.38 million subscribers would be the sale asset; Dish Wireless still in Chapter 11;
- SpaceX (SPCX) — up ~4% on Monday, trading just above its IPO price; a Boost deal would shortcut its Starlink Mobile launch;
- Crown Castle (CCI), American Tower (AMT) — flagged as alternative SpaceX partners; American Tower's CEO implied on an earnings call last week that talks with SpaceX are ongoing;