SpaceX spectrum deal for Starlink Mobile sends AT&T, Verizon, T-Mobile shares lower
In short
SpaceX is acquiring spectrum that enables Starlink Mobile services, which MarketWatch identified as Grain Management's 800 MHz spectrum portfolio. Shares of AT&T and Verizon fell 10% and T-Mobile US 14% on Friday morning, wiping out more than $50 billion in market value before lunch, NBC News reported. SpaceX said Starlink Mobile will combine satellites with a terrestrial network once it receives final FCC approval.
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SpaceX is acquiring spectrum that enables Starlink Mobile services, Reuters reported. MarketWatch reported that SpaceX plans to purchase Grain Management's 800 MHz spectrum portfolio to bolster its mobile ambitions, and Ars Technica said the nationwide 800 MHz spectrum will help Starlink provide mobile coverage indoors. According to CNBC, SpaceX announced the deal on Thursday. [ 1 , 4 , 9 , 12 ]
NBC News reported that Elon Musk's plan for SpaceX to "become a major mobile carrier in the U.S." sent shares of the three big U.S. wireless carriers down by double digits on Friday, wiping out more than $50 billion in market value before lunch. AT&T and Verizon each dropped 10% on Friday morning, while T-Mobile US fell 14%. Shares of Charter and Comcast, both of which sell wireless services under their own brands using Verizon's infrastructure, also fell. CNBC reported that Verizon stock was heading for its worst day since 2002, while MarketWatch said the news was lifting cell-tower stocks. [ 4 , 9 , 11 ]
"Once we receive final FCC approval, Starlink Mobile will deploy a flexible architecture combining our satellite-to-mobile constellation in space with an advanced terrestrial deployment that can seamlessly connect devices everywhere," the company said late Thursday, according to NBC News. SpaceX also said the Federal Communications Commission had approved the launch of 15,000 new satellites under Starlink Mobile, a SpaceX subsidiary. Musk wrote on X that the acquisition was "the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America." [ 11 ]
CNBC reported that, if cleared, the added spectrum will help SpaceX combine satellite and ground-based coverage once it builds out a network of towers. SpaceX did not immediately respond to CNBC's request for further information, including when the new services might come online if regulators approve them. [ 2 ]
According to SpaceX's second-quarter report, Starlink is available in 205 countries and had 12 million subscribers as of June 30, CNBC reported. The connectivity business had $1.66 billion in operating income on $4.29 billion in revenue in that period. Deutsche Bank analysts estimated that Starlink had 13.5 million subscribers at the end of September, 4.1 million of them in the U.S. NBC News reported that Starlink is the only profitable part of SpaceX's business, according to its latest earnings report. [ 2 , 11 ]
CNBC reported that SpaceX shares rose about 2.5% in extended trading after dropping 4% during regular market hours. MarketWatch said SpaceX still has a ways to go before it can seriously challenge the three major wireless operators but is making moves to grow its capabilities. [ 2 , 7 ]
Why it matters
Business outlets treated the deal as a challenge from SpaceX to the three major U.S. wireless carriers, and investors sold their shares. MarketWatch noted that SpaceX still has a ways to go before it can seriously challenge the carriers, and the new services still depend on regulatory approval.
Key facts
- SpaceX is acquiring spectrum that enables Starlink Mobile services. [ 1 , 2 , 6 ]
- MarketWatch reported that the seller is Grain Management and the asset is its 800 MHz spectrum portfolio. [ 4 ]
- Ars Technica said the nationwide 800 MHz spectrum will help Starlink provide mobile coverage indoors. [ 12 ]
- AT&T and Verizon shares dropped 10% and T-Mobile US stock 14% on Friday morning, NBC News reported. [ 11 ]
- CNBC reported that Verizon stock was heading for its worst day since 2002. [ 9 ]
- SpaceX said the Federal Communications Commission had approved the launch of 15,000 new satellites under Starlink Mobile. [ 11 ]
- Starlink had 12 million subscribers as of June 30, according to SpaceX's second-quarter report. [ 2 ]
Confirmed by several sources
Still unclear
- When Starlink Mobile services will come online. SpaceX did not immediately respond to CNBC's question about timing, and the services depend on regulatory approval.
- The price and terms of the spectrum acquisition. None of the reports give the price or terms.
- The seller of the spectrum. Only MarketWatch names Grain Management as the seller.
- Starlink's subscriber count at the end of September. The 13.5 million figure is an estimate by Deutsche Bank analysts, reported only by CNBC.
What local media are saying
Timeline, local time
- Oct 8: Reuters reports that SpaceX is to acquire spectrum that enables Starlink Mobile services. [ 1 ]
- Oct 8: CNBC reports that the spectrum deal is hitting shares of AT&T, Verizon and T-Mobile. [ 2 ]
- Oct 8: MarketWatch reports that SpaceX plans to buy Grain Management's 800 MHz spectrum portfolio. [ 4 ]
- Oct 9: CNBC reports that Verizon stock is heading for its worst day since 2002. [ 9 ]
- Oct 9: NBC News reports that the three big carriers have lost more than $50 billion in market value. [ 11 ]