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Why SpaceX made a $17B bet on the direct-to-cell market

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Why SpaceX made a $17B bet on the direct-to-cell market Aria Alamalhodaei PM PDT · September 9, 2025 SpaceX just fired off one of the biggest shots yet in the spectrum wars, agreeing to pay $17 billion to take over a massive chunk of wireless airwaves from EchoStar for Starlink’s direct-to-cell services.

The deal is the most aggressive signal yet that SpaceX wants to rule the satellite-to-phone market.

The significance of the sale, which sees SpaceX paying a mix of $8.5 billion in cash and $8.5 billion in SpaceX stock, centers around a finite re

The U.S. government, via the Federal Communications Commission, divides spectrum into “bands.” There are only so many usable frequencies, and users must coordinate to avoid interference. To raise the stakes even higher, only certain ranges work well for phones and satellites, which shrinks the pool of usable bands even further and creates a fierce competition for access.

The FCC auctions long-term licenses at high prices to private firms. The prime cellular bands were predominately amassed

In 2024, the FCC approved a new regulatory framework called Supplemental Coverage from Space that paved the way for satellites to legally extend carrier networks. SCS lets a satellite operator, in partnership with a terrestrial carrier, use the carrier’s existing phone spectrum to fill wireless coverage gaps as a secondary service. Later that year, SpaceX officially began offering its Direct-to-Cell service to T-Mobile users as a premium add-on.

That framework paved the way for SpaceX’s deal with EchoStar. It created a structure to let satellite operators tap into terrestrial networks.. And now, with the EchoStar deal, SpaceX does not need to partner with a terrestrial licensee for spectrum. Instead of depending on relationships with other firms, SpaceX has become the license holder.

Techcrunch event Join 10k+ tech and VC leaders for growth and connections at Disrupt 2025 Netflix, Box, a16z, ElevenLabs, Wayve, Sequoia Capital, Elad Gil — just some of the 250+ heavy hitters leading 200+ sessions designed to deliver the insights that fuel startup growth and sharpen your edge. Don’t miss the 20th anniversary of TechCrunch, and a chance to learn from the top voices in tech. Grab your ticket before Sept 26 to save up to $668. Join 10k+ tech and VC leaders for growth and connections at Disrupt 2025 Netflix, Box, a16z, ElevenLabs, Wayve, Sequoia Capital, Elad Gil — just some of the 250+ heavy hitters leading 200+ sessions designed to deliver the insights that fuel startup growth and sharpen your edge. Don’t miss the 20th anniversary of TechCrunch, and a chance to learn from the top voices in tech. Grab your ticket before Sept 26 to save up to $668. San Francisco | October 27-29, 2025 REGISTER NOW Of course, SpaceX is in the business of building rockets and satellites, not cell phones, so it still depends on the hardware makers and carriers to reach hundreds of millions of consumers. But SpaceX CEO Elon Musk has floated the idea of building a phone under his other business, X, which merged with xAI earlier this year. Mush has taken aim in particular at Apple’s ongoing collaborations with OpenAI. In August, X and xAI filed a lawsuit against the two companies, alleging anti-competitive practices.

Apple satellite features like Emergency SOS are enabled via a partnership with Canadian firm Globalstar, and Apple has committed over $1.5 billion to further expand satellite-enabled iPhone services. But some analysts are wondering if SpaceX’s move is leverage to persuade Apple to cooperate with SpaceX instead of Globalstar.

This is not the first time SpaceX has flexed its muscle in the spectrum wars.

The company spent years successfully battling Dish (a subsidiary of EchoStar) over the 12 GHz band that SpaceX wanted to use for Starlink. It also beefed over Dish/Echostar’s lack of use of the AWS-4 band – one of the spectrum licenses it ended up acquiring.

Separately, SpaceX and Kuiper have also sparred in FCC filings over interference rules and how competing satellite megaconstellations should share spectrum.

They have also been a major force propelling the FCC to revisit satellite spectrum-sharing rules. Earlier this year, the Commission opened a formal rulemaking to modernize satellite sharing limits after a petition from SpaceX, with Kuiper and others filing in support.

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Aria Alamalhodaei

Aria Alamalhodaei covers the space and defense industries at TechCrunch. Previously, she covered the public utilities and the power grid for California Energy Markets. You can also find her work at MIT’s Undark Magazine, The Verge, and Discover Magazine. She received an MA in art history from the Courtauld Institute of Art in London. Aria is based in Austin, Texas.

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