The anticipated merger between AT&T and EchoStar still needs to clear regulatory hurdles but it is poised to significantly reshape the US telecommunications sector.
With the Federal Communications Commission (FCC) advocating for the arrangement, the deal is expected to enhance AT&T’s spectrum holdings, particularly in low-band and mid-band frequencies, which are crucial for expanding both urban and rural 5G coverage.
For EchoStar, the merger takes the company out of the running to become the fourth US mobile network operator (MNO) and represents a strategic pivot towards a hybrid mobile network operator model, as it enters into an MVNO agreement with AT&T, providing a lifeline for EchoStar’s Boost Mobile.
Spectrum acquisition and competitive edge
The infusion of spectrum will bolster AT&T’s network capabilities, while the low-band spectrum infusion will eventually mean better 5G coverage, and the mid-band spectrum will result in superior capacity in the near term.
Competitors like Verizon have demonstrated the advantages of mid-band depth, which has led to improved customer retention and acquisition metrics. As AT&T integrates these new holdings, it stands to bolster its 5G mobile and FWA offerings quickly as the company closes the gap on Verizon’s C-band and T-Mobile’s huge 600 MHz + 2.5 GHz deployments. Likewise, the added spectrum nationwide will add resources to address rural broadband commitments and hasten copper decommissioning in legacy DSL markets.
Strategic market positioning for AT&T
The immediate impact of deployment is likely to be felt in AT&T’s fixed wireless access (FWA) services. AT&T’s strategy involves using FWA as a precursor to fibre expansion, allowing the company to establish a presence in underserved areas before rolling out more robust broadband solutions. The company has already seen a notable uptick in FWA subscribers, surpassing 200,000 net additions in Q2 2025.
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By GlobalDataThis momentum is expected to continue, potentially exacerbating challenges for traditional cable operators as AT&T expands its Internet Air service into new markets, particularly those earmarked for future fibre deployment. This approach mirrors tactics employed by T-Mobile, which has successfully leveraged FWA to build market share ahead of fibre deployments.
The deal’s financial implications raise concerns among investors. AT&T has faced challenges in its efforts to reduce its debt-to-EBITDA, and while the company can recover debt target levels within three years, the cost-benefit hinges on how quickly AT&T can deploy the spectrum. Even if regulatory hurdles are as minimal as expected, the low-band deployment will demand time and capital while the operator juggles fibre, FWA, and enterprise spending priorities.
Regulatory landscape and AT&T competitive concerns
While smaller regional operators may voice concerns regarding the competitive implications of AT&T’s acquisition of significant spectrum holdings, regulatory bodies are unlikely to intervene. The Justice Department’s previous hesitations regarding market concentration appear to be overshadowed by the FCC’s support for the deal, aligning with broader policy objectives.
In summary, the AT&T-EchoStar deal stands to enhance AT&T’s competitive positioning in the telecommunications market, particularly in the FWA segment, while also presenting challenges related to financial management and regulatory approval. As the landscape evolves, stakeholders will need to monitor the implications of this significant merger closely.
