A blockbuster acquisition suddenly ignited the market.
On the evening of August 26, after U.S. stock market opening, shares of American satellite communications company EchoStar surged over 84% at one point. By market close, EchoStar stock closed at $50.87, gaining 70.25%.
On the news front, American Telephone and Telegraph Company (AT&T Inc) announced it has agreed to acquire certain wireless spectrum licenses from EchoStar for approximately $23 billion (equivalent to about 165 billion yuan). As of Monday's close, EchoStar's total market capitalization was $8.597 billion.
AT&T Inc stated that as the wireless market approaches saturation and internet usage surges, this transaction will advance the company's investment plans and accelerate the construction of its fiber optic and 5G networks.
**Dramatic Surge**
On Tuesday Eastern Time, AT&T Inc announced it would acquire spectrum licenses from EchoStar for approximately $23 billion in cash. This transaction aims to enhance AT&T Inc's infrastructure layout in the telecommunications sector.
Influenced by this news, EchoStar's stock price surged dramatically after market opening, initially jumping over 84%, and closing with a gain of 70.25%. The latest total market capitalization reached $14.636 billion (approximately 104.8 billion yuan). AT&T Inc stock showed minimal volatility, closing down 0.63%, with a market value of approximately $204.215 billion (about 1.462 trillion yuan).
According to a press release on AT&T Inc's official website, AT&T Inc and EchoStar have agreed to enhance their long-term wholesale network services agreement, enabling EchoStar to operate as a hybrid Mobile Network Operator (MNO) and provide wireless services under the Boost Mobile brand. AT&T Inc will become EchoStar's primary network service partner, continuing to serve wireless customers.
AT&T Inc Chairman and CEO John Stankey stated: "This acquisition enhances and expands our spectrum portfolio while improving customers' 5G wireless and home internet experience in more markets. No company covers more territory than AT&T Inc, and no company does it better—pioneering the industry's only guarantee for wireless and fiber networks. We are injecting new momentum into our company strategy of investing in valuable wireless and broadband assets to become America's best connectivity provider."
According to the introduction, AT&T Inc will acquire approximately 30MHz of nationwide 3.45GHz mid-band spectrum and approximately 20MHz of nationwide 600MHz low-band spectrum in an all-cash transaction worth about $23 billion, subject to certain adjustments.
These licenses cover virtually all U.S. markets (over 400 markets in total), significantly enhancing AT&T Inc's low-band and mid-band spectrum holdings.
The transaction is expected to complete by mid-2026, subject to certain closing conditions, including regulatory approvals.
AT&T Inc stated this transaction will help AT&T Inc maintain its long-term leadership in advanced high-performance connectivity in 5G and fiber. AT&T Inc operates America's largest wireless network and is the first major carrier to announce plans to lead commercial-scale Open RAN deployment in the United States. The acquired licenses will enable AT&T Inc to continue maintaining wireless leadership through enhanced 5G coverage, higher reliability, and faster speeds.
AT&T Inc is the largest fixed-line and mobile telecommunications service provider in the United States, also providing broadband and pay-TV services. Founded in 1877, it once monopolized America's long-distance and local telephone markets for an extended period. AT&T Inc has undergone multiple breakups and reorganizations over the past 20 years. Currently, it serves a combined 150 million users, of which 85.1 million are wireless subscribers.
While announcing the above transaction, AT&T Inc reiterated its 2025 financial guidance and stated its intention to fund spectrum purchases using cash and incremental borrowing. Following transaction completion, AT&T Inc expects its net debt-to-adjusted EBITDA ratio to rise to approximately 3x, returning to levels consistent with its leverage target (around 2.5x) within about three years.
AT&T Inc maintains its capital return plan outlined at its 2024 Analyst and Investor Day and updated in its Q2 2025 earnings report, including providing $20 billion in share repurchase authorization for the 2025-2027 period.
**Continuously Loss-Making EchoStar**
According to official information, EchoStar is an American telecommunications company founded in 1980, headquartered in Englewood, Colorado. Its main business encompasses satellite TV services, wireless network construction, and internet TV operations. EchoStar provides multi-channel video programming and mobile services through its subsidiaries Dish Network, Boost Mobile, Sling TV, EchoStar Mobile, and Hughes Network Systems.
Reviewing EchoStar's previously released financial reports, its operating situation has not been optimistic. In Q1 FY2025, revenue was $3.87 billion compared to $4.015 billion in the same period last year, a 3.61% year-over-year decrease; net loss reached $203 million compared to a net loss of $108 million in the same period last year, expanding 87.57% year-over-year.
EchoStar once faced serious financial difficulties, having missed interest payments multiple times.
This transaction is part of EchoStar's ongoing efforts to address Federal Communications Commission (FCC) investigations. The FCC is investigating whether EchoStar has met 5G deployment requirements, which are necessary conditions for the company to maintain its spectrum licenses.
EchoStar co-founder and Chairman Charlie Ergen stated: "Despite industry skepticism, I am deeply proud that the EchoStar team deployed the world's first Open RAN network at record speed. EchoStar and Boost Mobile have completed all FCC network construction milestones. This sale of spectrum to AT&T Inc and the hybrid Mobile Network Operator (MNO) agreement are key steps in addressing FCC spectrum utilization issues."
Following transaction completion, portions of Boost Mobile's Radio Access Network (RAN) will be gradually retired. EchoStar's other business operations including DISH TV, Sling, and Hughes will not be affected by this transaction.
EchoStar CEO and President Hamid Akhavan stated: "This transaction puts our business on a stable financial path, further promoting EchoStar's long-term success and enhancing our innovation and competitive capabilities as a hybrid network operator. Transaction proceeds will be used to repay portions of debt and fund EchoStar's ongoing operations and growth plans. We will continue working with the U.S. government and wireless industry participants to evaluate strategic opportunities for our remaining spectrum portfolio."
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