AT&T's Acquisition Of Ecostar's Spectrum - "Use It Or Lose It"

AT&T announced its intention to purchase spectrum licenses from EchoStar for approximately $23 billion. EchoStar will use the proceeds of this transaction primarily to retire debt obligations, fund its continued operations, and invest in growth initiatives. In essence, the deal:
 

• Is good news for AT&T’s customers. Not all radio spectrum caters equally well to customer demand for connectivity. This deal will add an average of approximately 50 MHz of low-band and mid-band spectrum to AT&T’s holdings. The spectrum in the 3.45 GHz and 600 MHz range is the sweet spot of spectrum – a good compromise between coverage area and bandwidth. Hence, the deal will enhance the 5G wireless and home internet experiences of AT&T’s customers. European regulators take note: European telecom mergers would benefit from a genuine single market with one spectrum and common rules.
• Allows EchoStar to operate as a hybrid mobile network operator in the US. AT&T and EchoStar also agreed to enhance their wholesale network services agreement. The telcos will create a hybrid mobile network operator (MNO) relationship. This enables EchoStar to operate as a hybrid MNO under the Boost Mobile brand on a cloud-native 5G core connected to AT&T’s network. EchoStar is the world’s first Open RAN network. Boost Mobile’s own radio access network will be decommissioned over time.

 
Telecoms Must Up Their Innovation Capabilities Beyond Tech

On the face of it, the deal looks like just a spectrum deal. However, it is about more. For me, the main takeaways from the deal are that:
 

• Telcos must boost their network as the core asset to fight disintermediation. Telcos face threats from eSIMs, hyperscalers, and OTT. And while network APIs offer significant opportunities for telcos, they also open the gates to core network features and functions. They therefore could increase the risk of disintermediation vis-à-vis hyperscalers and MVNOs if telcos fail to add more value for their customers. The deal underlines that the network remains the most critical asset for integrated telcos and NetCos. ATT’s spectrum deal reflects ATT’s desire to offer better and differentiated customer experiences through best-in-class connectivity offerings.
• There is a case for regulatory intervention if telcos fail to innovate. The deal is part of EchoStar’s efforts to resolve the Federal Communications Commission’s (FCC) inquiries. EchoStar faced pressure from the FCC to use the spectrum. The FCC’s regulations are clear: ‘use it or lose it‘! Radio spectrum is considered a public good. It’s a scarce natural resource. The deal clarifies that the US telecoms regulator insists that radio spectrum holders must deliver innovative services for customers rather than engage in radio spectrum warehousing.
• Demand for direct-to-device LEO connectivity could increase. EchoStar will use part of the cash it receives from the deal for new initiatives. A main EchoStar project relates to Low Earth Orbit Satellites. EchoStar’s LEO offering will deliver direct-to-device (D2D) connectivity to provide global talk, text, and broadband services directly to standard 5G non-terrestrial network (NTN) handheld devices. The offering aims at consumers, enterprises, and governments across the globe. EchoStar eyes 200 satellites by 2028, with commercial service starting in 2029. In the long term, many more satellites will be planned. The cost of EchoStar’s LEO constellation is $5 billion. Apple– or T-Mobile-like arrangements could increase the demand for LEO D2D services.

If you want to discuss the Future of Telecoms or the LEO opportunity, feel free to contact us or meet us at World Space Business Week, September 15-19, 2025, in Paris, France.

In a forthcoming series of reports published as part of the SITSI research program, I will explore the technical, operational, and cultural shifts needed to expand telcos’ ecosystem potential. From agile transformation and organizational redesign to customer journey mapping and service simplification, the goal is to help telcos collaborate in various ecosystems and industry initiatives.
 

• The Future Of Telecoms 2030
• Choose The Right Telco Business Model
• Growth Opportunities In The Telco Sector
• Network Infrastructure Evolution Opens New Value Propositions
• Embrace The Opportunities Of Network API Monetization
• Embrace AI In The Telco Context

Please get in touch with me (d.bieler@pacanalyst.com) if you want to discuss any of these themes or contribute to the research.