EchoStar Inks Deal to Usher in Era of (More) SpaceX Dominance in NTN IoT and NR

SpaceX has officially inked a US$17 billion dollar deal with incumbent satellite operator EchoStar (subsidiary of DISH Network) to acquire its long-idled AWS-4 and H-block spectrum (S-band) for wireless services. To note, this is the U.S.-based spectrum being sold by EchoStar, and not the Europe-wide S-band spectrum used by EchoStar Mobile to connect proprietary and LoRa devices, modules, and sensors. With the sale, EchoStar is also cancelling the previously announced US$1.8 billion contract with MDA Space to build a new next-generation Direct-to-Device (D2D) constellation in Low Earth Orbit (LEO). SpaceX is expected to capture over 84% of the commercial North American D2D market by the end of 2025—and is now positioned to deliver completely independent mobile satellite services via the S-band, eliminating reliance on shared telco spectrum—positioning the competitive landscape for satellite IoT at an inflection point. The key questions from this acquisition are: what is the trajectory for satellite IoT in a market increasingly defined by SpaceX’s scale and first-mover advantage? Who are the winners and losers and what options are left for the competition?

SpaceX’s spectrum coup was hardly a surprise. It had been chasing S-band approval from the Federal Communication Commission (FCC) for years, only to be repeatedly denied as these bands were treated as exclusively licensed bands originally carved out for Mobile Satellite Service (MSS) providers—EchoStar, Globalstar, Inmarsat, Iridium—closing the door for new entrants. Then came EchoStar, for many years one of Starlink’s biggest critics in the FCC spectrum food fight, and also an allegedly very “light” user of its highly exclusive AWS-4 spectrum. The allegation launched an all-thrills investigation by the new very-pro Low Earth Orbit (LEO) FCC chairman Brendan Carr, with the threat to revoke spectrum licenses. It appears now that instead of fighting the FCC, it has decided to sell off its licenses.

The satellite world, especially in the U.S. Internet of Things (IoT) and smartphone connectivity space, is now being reshaped. While EchoStar now gets breathing room to cover its debts and secure Starlink connectivity for Boost Mobile users, SpaceX gains a significant spectrum “moat.” It now has access to the same exclusive MSS spectrum that allows Iridium, Globalstar, and Viasat to differentiate their systems, both from a performance and a coverage perspective. This spectrum will equip Starlink’s future Direct-to-Cellular (D2C) satellites with 20-fold throughput gains, elevating the whole network’s capacity 100X from today, and enabling connectivity beyond exclusivity zones—regional carve-outs built around Mobile Network Operator (MNO) licenses. The acquisition of the S-band also finally opens the gates for another evolution frontier for SpaceX, supplying 5G Non-Terrestrial Network (NTN) standardized connectivity direct to devices.

Satellite direct-to-smartphone connectivity is expected to be available to 1.8 billion users—both free users (for emergency response situations, etc.) and paid subscribers (for more value-added NTN services)—by 2030. The consumer opportunity is significant, and this doesn’t even account for the hybrid cellular-satellite Machine-to-Machine (M2M) IoT market, which is forecast to exceed 10 million IoT connections by 2030 using Narrowband (NB) NTN and New Radio (NR) NTN standards. Overall, satellite IoT connections are expected to exceed 26 million by 2030. The upside potential is significant for satellite operators and chipset vendors alike and is likely to spark a new wave of satellite devices to enter the market as chipset vendors exploit the opportunity.

Coincidentally, Earth station devices remain the final piece that distinguishes Apple-Globalstar and Iridium’s solutions from SpaceX. They control the full technology stack down to the devices—smartphones and IoT modules. SpaceX, however, “controls the launch pad” and limiting SpaceX access to Apple devices may galvanize Elon Musk to finally make good on his word to launch an “X phone” for the consumer market. SpaceX is no stranger to the IoT sector either, given its acquisition of Swarm Technologies back in 2021, which then manufactured products such as the Swarm environmental sensor tiles and asset trackers. Also adjacent to SpaceX’s new system would be Skylo, as this network also connects devices supporting standardized satellite protocols over the L and S band. SpaceX’s entry into NTN would galvanize the market and be a boon for Skylo’s overall business.

Telcos like Verizon or AT&T should not count on AST Space Mobile to come through with a competitive network solution to SpaceX. By the time the network is deployed (if ever), there will be little room left for business. Other players such as Globalstar, Iridium, Viasat, EchoStar, and Skylo already offer viable options to integrate the satellite piece of a hybrid cellular-satellite service offering. The other reality here is that unless Musk plans a proprietary approach, he will need to partner with MNOs to integrate his ground stations into telco Radio Access Networks (RANs) and 5G Core networks. While the next generation Starlink D2C network can certainly become a truly global and independent operator, and even a potential threat to some telcos, integrating Starlink gateways with a regional telco RAN and core is a requisite.

Many markets are beginning to implement satellite into their digital transformation journey, including digital fisheries, smart rails, delivery drones, humanoid robotics, and Positioning, Navigation, and Timing (PNT), which have growing demand for satellite, but remain largely untapped by operators. Chipset vendors able to supply the U.S. market are well-positioned to profit from this new wave of hybrid cellular-satellite connectivity in the region. While satellite will not often be the primary source of connectivity for most use cases, the ability to close the roughly 40% landmass gap left by cellular networks in the United States unlocks significant potential. The demand is there, and it will grow.