AT's Acquisition of EchoStar Spectrum to Expand Network Capacity Over Several Years

What's Happening?

AT&T is set to acquire significant spectrum assets from EchoStar, including 30MHz of nationwide 3.45GHz midband spectrum and 20MHz of nationwide 600MHz lowband spectrum. While the midband spectrum can be integrated into AT&T's existing network swiftly, the deployment of the lowband spectrum will require more time and effort. AT&T CEO John Stankey indicated that the lowband spectrum deployment would take several years due to the need for additional infrastructure, including support for 600MHz at approximately 35,000 cell sites. The acquisition is valued at $23 billion and is expected to enhance AT&T's network capabilities, particularly in fixed wireless access (FWA) services.

Why It's Important?

The acquisition of EchoStar's spectrum is crucial for AT&T as it aims to expand its network capacity and improve service offerings. The midband spectrum will allow for immediate revenue generation, while the lowband spectrum will enhance coverage over time. This expansion is expected to bolster AT&T's wholesale business, enabling better collaboration with cable operators and increasing Boost Mobile traffic on its network. The deal also opens up capacity for nearly 1 million more FWA subscribers, which could significantly impact the competitive landscape, particularly for cable operators facing subscriber losses to FWA services.

What's Next?

AT&T will focus on integrating the midband spectrum quickly, with potential deployment before the transaction closes in mid-2026, pending regulatory approval. The company will work on the gradual deployment of the lowband spectrum, addressing FCC requirements and infrastructure needs. Analysts anticipate further sales of EchoStar's remaining spectrum assets, with interest from other major players like T-Mobile and Starlink. AT&T's expansion in FWA services will continue, potentially increasing its subscriber base and revenue significantly by 2029.