This article first appeared on GuruFocus .
SpaceX ( NASDAQ:SPCX ) is in talks to buy EchoStar's ( NASDAQ:ECHO ) Boost Mobile wireless service or gain access to its network, the Washington Post , citing people familiar with the negotiations. EchoStar shares rose 4.93% in premarket.
A deal would support SpaceX's plan to build Starlink Mobile, a hybrid satellite and ground network meant to compete with AT&T ( NYSE:T ), Verizon ( NYSE:VZ ) and T-Mobile ( NASDAQ:TMUS ). EchoStar, which runs Boost Mobile on network capacity leased from AT&T and T-Mobile, had 7.38 million wireless subscribers at the end of the second quarter. Elon Musk personally discussed the deal with EchoStar Chairman Charlie Ergen last month. The service may need consent from AT&T and T-Mobile, as Boost's network-leasing agreements may not transfer to a new owner without the carriers' approval.
Telecom stocks have been under pressure since SpaceX's $8 billion spectrum deal in October, and analysts have said SpaceX would need to invest heavily in ground infrastructure, customer service and handset subsidies to compete. SpaceX and EchoStar didn't immediately respond to requests for comment.
