Why SpaceX made a $17B bet on the direct-to-cell market

SpaceX has made a significant strategic move in the satellite-to-phone market by acquiring a large portion of wireless spectrum from EchoStar for $17 billion, split evenly between cash and SpaceX stock. This acquisition centers on securing valuable spectrum—a limited range of radio frequencies essential for wireless communication. The deal follows the FCC’s 2024 approval of the Supplemental Coverage from Space (SCS) framework, which allows satellites to extend terrestrial carrier networks using existing phone spectrum. Unlike previous arrangements where satellite operators had to partner with terrestrial carriers, SpaceX now holds the spectrum license directly, positioning itself to more aggressively expand its Starlink Direct-to-Cell service, which it began offering to T-Mobile users as a premium add-on. While SpaceX focuses on building rockets and satellites rather than cell phones, CEO Elon Musk has hinted at entering the phone market through his other venture, X, potentially challenging established players like Apple, which currently partners with Globalstar for satellite-enabled iPhone services. SpaceX’s spectrum acquisition may