Verizon explores deal for EchoStar’s AWS-3 spectrum licenses - report

Investing.com -- Verizon Communications is in talks with EchoStar Corp. to acquire part of its wireless spectrum, Bloomberg News reported Tuesday, citing sources familiar with the discussions.

The negotiations focus on EchoStar’s AWS-3 licenses, which are considered valuable for carrying 5G traffic, the report said.

Shares in EchoStar jumped 7% in premarket trading following the report.

If an agreement is reached, Verizon would join AT&T and SpaceX, both of which have already purchased spectrum from Charlie Ergen’s satellite-TV and telecom company.

EchoStar started selling some assets last month as part of efforts to address a Federal Communications Commission probe into its rollout progress.

In a regulatory filing, EchoStar valued the AWS-3 spectrum at $9.8 billion. Recent transactions involving AT&T and SpaceX cleared well above book value, though one of the people noted this may not necessarily apply in Verizon’s case.

Another portion of the AWS-3 spectrum will be auctioned by the U.S. government next year.

Chief Executive Officer Hamid Akhavan said in an interview with Bloomberg last month that the company would be open to selling more of its spectrum holdings, including AWS-3 licenses. That’s because EchoStar no longer intends to build a nationwide wireless network to rival the largest carriers.

“We will find proper homes for those pieces of the spectrum in time,” Akhavan said.

After acquiring spectrum with the aim of becoming the fourth U.S. wireless carrier, EchoStar has shifted course and now plans to run its Boost Mobile business through a hybrid model that uses AT&T’s network.

Earlier this month, the company said it anticipates having $24.1 billion in cash once it applies spectrum sale proceeds toward debt repayment.

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