SpaceX, led by Elon Musk, is venturing into the cellphone industry by acquiring cellular spectrum licenses worth billions, which puts established telecom companies in a tight spot.
This week, Musk’s firm finalized an $8 billion agreement for these licenses, which will facilitate the creation of a terrestrial network aimed at enhancing coverage gaps for SpaceX’s satellite service, Starlink.
However, utilizing this spectrum is contingent upon approval from the Federal Communications Commission (FCC), and the chair of the FCC appears to be optimistic about this development.
“President Trump is unleashing a new Golden Age of connectivity in America,” FCC Chairman Brendan Carr noted on X, responding to a post about Musk’s new initiative.
When asked about the deal on CNBC the following day, he mentioned that the commission plans to “sit back and watch” what Musk does next.
Traditional telecom companies reacted less positively; shares for AT&T, T-Mobile, and Verizon dropped early on Friday.
SpaceX indicated that once it gains FCC approval, the company intends to implement a “flexible architecture that combines our satellite-to-mobile constellation in space.”
The plan involves leveraging both conventional cell towers and SpaceX’s extensive satellite network to create a new cellular service.
This week, the FCC also permitted SpaceX to launch up to 15,000 satellites specifically for cellular service.
Information regarding pricing and availability for Starlink Mobile is still forthcoming, and the company did not provide any comments when approached.
While some investors were apprehensive, Verizon expressed a degree of confidence against this significant potential rival.
“A company can have billions of dollars of spectrum, but if they do not have the network to use it, it’s just empty airwaves,” a Verizon representative stated.
The announcement about the spectrum temporarily boosted SpaceX’s stock to heights not seen since July, as it traded around $163, marking a 1.6% increase on Friday.
AT&T declined to comment, and T-Mobile, which already has an internet partnership with Starlink, also refrained from making any statements.
