EchoStar (NASDAQ:SATS) shares climbed 8.8% premarket on Tuesday after Bloomberg reported that Verizon Communications (NYSE:VZ) is in talks to acquire some of its wireless spectrum portfolio.
The discussions focus on EchoStar’s AWS-3 licenses, valuable for carrying 5G wireless signals, the report said, citing people familiar with the matter.
“Verizon’s potential purchase of some of EchoStar’s holdings would add capacity to its fixed-wireless access service, providing runway for growth in broadband and 5G,” Bloomberg Intelligence analyst John Butler said. “The advent of 6G around 2030 will require more spectrum, suggesting a smart deal.”
EchoStar (NASDAQ:SATS) shares have already surged ~222% this year. The company, which has been struggling financially to build out its own 5G network across the U.S., said earlier this month that it expects to have over $24B in total cash after debt repayment, following the sale of certain wireless spectrum licenses to AT&T (T) and SpaceX (SPACE).
The satellite communications provider found itself in a sticky situation after the FCC in late July asked the company to sell some spectrum licenses after it failed to make good use of them.