Elon Musk's SpaceX has reached an agreement worth approximately $17 billion with EchoStar to acquire spectrum licenses that will be used to enhance SpaceX's Starlink satellite network.

The acquisition of EchoStar's AWS-4 and H-band spectrum licenses includes up to $8.5 billion in cash and up to $8.5 billion in SpaceX stock. SpaceX will also pay approximately $2 billion in cash interest on EchoStar's debt through November 2027.

SpaceX and EchoStar will enter into a long-term commercial agreement under which EchoStar's Boost Mobile customers will gain access to SpaceX's next-generation Starlink Direct to Cell service.

Last month, AT&T announced it would spend $23 billion to acquire wireless spectrum licenses from EchoStar, a move that would significantly expand its low-band and mid-band network coverage.

EchoStar stated that it expects both the AT&T transaction and this SpaceX deal to address recent inquiries from the Federal Communications Commission (FCC) regarding US 5G technology deployment.

EchoStar announced on Monday (September 8) that it will use part of the proceeds from this transaction to pay down debt. The company indicated that its existing businesses including Dish TV, Sling streaming service, and Hughes satellite communications will not be affected by this transaction.