EchoStar has cancelled a recent $1.8 billion contract with MDA Space after a change in direction saw it sell its AWS-4 and H-block spectrum licenses to SpaceX.
The original contract announced August 1 was a very good news and was reflected in a strong financial outlook as discussed during the companies quarterly earnings update on August 7.
MDA was to have initially built 100 satellites on its Aurora platform for EchoStar’s Direct-to-Device satellite constellation. A contract option could have seen MDA build more than 200 satellites, with a value of approximately $3.5 billion.
EchoStar however had been in discussion with the U.S. Federal Communications Commission (FCC) over its spectrum and as a result has agreed to sell its AWS-4 and H-block spectrum licenses to SpaceX. EchoStar will receive USD $17 billion, half in cash and the rest in SpaceX stock. SpaceX will also provide “approximately $2 billion of cash interest payments payable on EchoStar debt through November of 2027,” EchoStar stated.
The acquisition of EchoStar spectrum is important to SpaceX who will now roll out a new-generation of Starlink Direct to Cell satellites.
Gwynne Shotwell, president & COO, SpaceX said, “SpaceX’s first generation Starlink satellites with Direct to Cell capabilities have already connected millions of people when they needed it most – during natural disasters so they could contact emergency responders and loved ones – or when they would have previously been off the grid. In this next chapter, with exclusive spectrum, SpaceX will develop next generation Starlink Direct to Cell satellites, which will have a step change in performance and enable us to enhance coverage for customers wherever they are in the world.”
As for MDA who were caught in the middle of the EchoStar spectrum issue, the company stated that they “will be compensated for all related termination costs and fees as per the EchoStar contract.”
MDA’s backlog is still a hefty $4.6 billion according to the company and the company reiterated “its fiscal 2025 financial outlook and guidance announced on August 7, 2025.”
The Canadian Press reported that MDA Space CEO Mike Greenley said “This is a very unexpected event.” Greenley added “This is obviously very sudden and a drastic change to the entire trajectory of EchoStar’s business. And so that’s a highly, highly unusual situation.”
MDA’s stock was down 24.34% today at time of publication.
- Updated on Sep. 8, 2025, 2:35 p.m. Eastern.
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