• SpaceX buys EchoStar spectrum in $17B direct-to-cell deal

• Acquisition combines Starlink satellites with AWS-4, H-block licenses

• Move could expand satellite mobile access, challenges remain in Africa

In a deal valued at $17 billion, Elon Musk's SpaceX announced on Monday, September 8, that it is acquiring mobile frequencies from U.S.-based EchoStar. The move is intended to accelerate the development of "direct-to-cell" technology, which enables mobile phones to connect directly to satellites without relying on ground-based cellular towers.

According to media reports, the acquisition includes EchoStar's AWS-4 and H-block spectrum licenses, which are used for mobile and satellite communications. SpaceX will pay up to $8.5 billion in cash and an equivalent amount in stock while also assuming $2 billion of EchoStar's debt obligations until 2027.

The deal provides a financial lifeline for EchoStar, which is burdened with $25 billion in debt and was under investigation by the Federal Communications Commission (FCC) for not using certain frequencies. For SpaceX, the acquisition will combine EchoStar's spectrum with its Starlink satellites to advance its mobile satellite connectivity project, which aims to eliminate dead zones.

The agreement also includes a long-term commercial partnership. Boost Mobile, EchoStar's prepaid brand, will gain access to the future Starlink direct-to-cell service through the operator's 5G network.

"In this next chapter [...] SpaceX will develop next generation Starlink Direct to Cell satellites, which will have a step change in performance and enable us to enhance coverage for customers wherever they are in the world," commented Gwynne Shotwell, President and COO of SpaceX. She added that the first Starlink satellites with direct-to-cell capabilities have already connected millions of people in critical moments—during natural disasters, to reach emergency services or loved ones, or when they were off-grid.

Potential and Challenges of Direct-to-Cell

While the deal primarily affects the U.S. market, it is part of a global trend that also has implications for Africa. Starlink has been active in more than 20 African countries since 2023, but its reach is limited by the high cost of equipment and subscriptions, which often exceed the average household income. Direct-to-cell technology could disrupt this by eliminating the need to purchase a connection kit, allowing any mobile phone to theoretically connect directly to satellites.

However, many questions remain unanswered. The final cost of the service to the end user is unknown, as is how it will integrate with existing mobile operators. Regulatory hurdles are also a major factor, as each country must authorize the use of satellite frequencies for mobile services.

It will also be interesting to see how the potential rollout of direct-to-cell technology impacts Africa's satellite internet market. In addition to Starlink, other players such as Eutelsat-OneWeb, which is focusing on multi-orbit solutions, as well as Lynk Global, AST SpaceMobile, Omnispace, and Yahsat, are all making strategic moves. Some national operators, such as Nigeria's Nigcomsat, are also trying to secure a position.

According to the GSMA, there were about 320 million mobile internet subscribers in sub-Saharan Africa at the end of 2023, representing a penetration rate of 27%. At the same time, nearly 710 million people, or 60% of the population, still do not use mobile internet despite living in areas with network coverage. The World Bank estimates that a 10% increase in mobile internet penetration in Africa could lead to a 2.5% rise in GDP per capita.

Louis-Nino Kansoun