AT&T to Acquire EchoStar Spectrum for $23 Billion, Boosting 5G Capabilities

AT&T has announced a definitive agreement to acquire wireless spectrum licenses from EchoStar for approximately $23 billion in an all-cash transaction. This strategic move aims to bolster AT&T's 5G and broadband capabilities, positioning the company to meet the escalating demand for high-speed internet services across the United States.

The acquisition encompasses approximately 30 MHz of nationwide 3.45 GHz mid-band spectrum and 20 MHz of nationwide 600 MHz low-band spectrum, covering over 400 U.S. markets. These additions are expected to significantly enhance AT&T's network infrastructure, providing improved coverage, reliability, and faster data speeds for consumers and businesses alike.

John Stankey, Chairman and CEO of AT&T, emphasized the strategic importance of the deal, stating, "This acquisition bolsters and expands our spectrum portfolio while enhancing customers' 5G wireless and home internet experience in even more markets." He added, "We're adding fuel to our winning strategy of investing in valuable wireless and broadband assets to become America's best connectivity provider."

EchoStar, headquartered in Englewood, Colorado, has been under regulatory pressure to meet 5G network buildout obligations after investing over $40 billion in spectrum rights over the years. The sale of these spectrum licenses provides essential liquidity to EchoStar, which is burdened with over $30 billion in debt. Hamid Akhavan, CEO and President of EchoStar, commented on the transaction, saying, "This transaction puts our business on a solid financial path, further facilitating EchoStar's long-term success, and enhancing our ability to innovate and compete as a hybrid network operator."

As part of the agreement, AT&T and EchoStar will expand their long-term wholesale network services partnership. EchoStar will continue to operate as a hybrid mobile network operator under the Boost Mobile brand, utilizing AT&T's network infrastructure. This arrangement allows EchoStar to maintain its wireless customer base without the capital expenditure of building its own nationwide network.

The transaction is expected to close in mid-2026, pending regulatory approvals and other customary closing conditions. AT&T plans to finance the acquisition using a combination of cash on hand and incremental borrowings. Following the transaction, AT&T expects its net debt-to-adjusted EBITDA ratio to increase to the 3x range, with plans to return to its long-term target of 2.5x within approximately three years. The company has reaffirmed its full-year 2025 financial guidance and capital return plans, including an expected $20 billion of share repurchase capacity during 2025-2027.

The market responded positively to the announcement. EchoStar's shares surged by over 70%, reflecting investor optimism about the deal's potential to alleviate the company's debt burden and regulatory pressures. AT&T's shares experienced a modest increase, indicating a positive but measured response from the market.

This acquisition aligns with AT&T's broader strategy to become a comprehensive connectivity provider. By acquiring these spectrum licenses, AT&T aims to accelerate the deployment of its fixed wireless home internet service, AT&T Internet Air, and complement its fiber expansion. This convergence strategy could help reduce customer churn and increase average revenue per household by bundling wireless and home internet services.

The transaction is subject to approval by the Federal Communications Commission (FCC). Historically, the FCC has been cautious about major wireless carriers consolidating spectrum holdings. However, analysts suggest that AT&T is more likely to receive approval because the company is expected to deploy the spectrum for network improvements rather than warehousing unused licenses.

In summary, AT&T's acquisition of EchoStar's spectrum licenses represents a significant step in the company's efforts to strengthen its position in the competitive telecommunications industry. By enhancing its 5G and broadband capabilities, AT&T aims to meet the growing demand for high-speed internet services and solidify its role as a leading connectivity provider in the United States.