Nov 2 (Reuters) – SpaceX is in talks to buy EchoStar’s wireless service Boost Mobile or gain access to its network, which it leases from AT&T and T-mobile, the Washington Post reported on Monday.
SpaceX has held talks with telecom firm EchoStar in recent months about launching its own signature wireless service through a deal with the company, the report said, citing people familiar with the negotiations.
The move would support the Elon Musk-led company’s plans to build a hybrid satellite-terrestrial mobile network through Starlink Mobile, combining its satellite constellation with ground-based infrastructure to challenge US wireless giants AT&T, Verizon and T-Mobile.
Telecom stocks came under pressure following SpaceX’s $8 billion spectrum deal, as investors assessed the threat posed by a new satellite-powered wireless competitor.
Acquiring Boost Mobile or accessing its network could give SpaceX a ready-made subscriber base and distribution platform to accelerate its plans.
EchoStar had 7.38 million wireless subscribers at the end of the second quarter, primarily consisting of Boost Mobile and Gen Mobile customers.
Musk has discussed the deal personally, meeting with EchoStar chairman Charlie Ergen last month, the Washington Post’s report said.
The proposed service may need consent from AT&T and T-Mobile, as Boost Mobile’s existing network-leasing agreements may not be transferable to a new owner without the carriers’ approval, the report said.
SpaceX and EchoStar did not immediately respond to Reuters’ requests for comment.
EchoStar shares rose about 3.4% in premarket trading, while T-Mobile slipped 2%. AT&T and Verizon also edged lower.
Analysts and industry experts have pointed to the challenges SpaceX might face in building a network that could become the fourth-largest wireless carrier in the US.
The rocket and satellite company will likely need to invest heavily in ground infrastructure, customer service, handset subsidies and promotions — costly areas of the wireless business where the Big Three already have extensive operations.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shilpi Majumdar)
