EchoStar stock skyrockets 70% on AT&T deal to buy wireless spectrum for $23 billion

EchoStar
stock roared more than 70% higher on Tuesday after AT&T
said it agreed to purchase certain wireless spectrum licenses from the telecom company for about $23 billion in an all-cash deal.

The sale will add about 50 megahertz of mid-band and low-band spectrum to AT&T�s network, with the licenses covering more than 400 markets across the U.S., AT&T said. The deal is expected to close in mid-2026, pending regulatory approval.

EchoStar said in a regulatory filing that the transaction is part of the company�s �ongoing efforts to resolve the Federal Communications Commission�s inquiries.�

FCC Chairman Brendan Carr wrote in a May letter addressed to EchoStar cofounder and Chairman Charlie Ergen that the agency�s staff would investigate the company�s compliance with federal requirements to build a 5G network.

The letter followed complaints from Elon Musk�s SpaceX that EchoStar had left �valuable mid-band spectrum chronically underused,� and the FCC should take steps to let �new satellite entrants� put it to use.

SpaceX owns Starlink, which provides internet service through a constellation of low Earth orbit satellites.

As part of Tuesday�s announcement, AT&T and EchoStar also agreed to expand their network services agreement, enabling EchoStar to operate as a hybrid mobile network operator providing wireless service under the Boost Mobile brand.

�EchoStar and Boost Mobile have met all of the FCC�s network buildout milestones,� Ergen said in a statement. �However, this spectrum sale to AT&T and hybrid MNO agreement are critical steps toward resolving the FCC�s spectrum utilization concerns.�

AT&T CEO John Stankey told CNBC that the deal is �a win all the way around.�

�It�s a fantastic opportunity to see more services put together the way customers want to buy them together,� Stankey said in an interview on �Squawk Box.� �And as a result of that, I think ultimately regulators are going to look at this and say it�s very, very attractive.�

AT&T shares fell less than 1%.