SpaceX’s Spectrum Acquisition Hits Wireless Carriers
Shares of leading wireless carriers tumbled during after-hours trading on Thursday after SpaceX, led by Elon Musk, secured a significant piece of spectrum that could enable it to compete directly with them.
Verizon’s stock dropped nearly 7%, AT&T fell about 8%, and T-Mobile decreased around 7% as news circulated that Starlink might soon encroach on their market, as reported by Yahoo Finance. Meanwhile, shares of SpaceX, which became publicly traded under the ticker SPCX in June, experienced a 3% increase in after-hours trading.
The company has agreed to acquire a nationwide set of low-band licenses, which includes up to 14 megahertz of paired airwaves in the 800 MHz band, from digital infrastructure company Grain Management. The price of the deal hasn’t been disclosed, and it still requires approval from the Federal Communications Commission (FCC).
SpaceX indicated that the new airwaves would enhance its satellite-to-phone service, improving connectivity even through walls and buildings in remote areas of the country.
“This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America,” Musk shared on X.
This acquisition is part of a broader buying spree that also includes 65 megahertz obtained from EchoStar for a total of $19.6 billion, according to Investing.com. During an earnings call in August, SpaceX President Gwynne Shotwell expressed clear ambitions for the company.
“I anticipate us to be able to acquire quite a few of [AT&T, Verizon, and T-Mobile’s] customers because I think our service will be better,” Shotwell said, as noted by Yahoo Finance, adding that a second generation of Starlink Mobile satellites is set to launch in 2027.
The airwaves in question have a complicated past. T-Mobile received the 800 MHz licenses following its acquisition of Sprint but never activated them, subsequently transferring them to Grain for $2.9 billion along with its own 600 MHz holdings. Meanwhile, satellite competitor AST SpaceMobile has also sought the same spectrum, which Grain intended to sell for about $6 billion.
Some analysts, like those at Barron’s, believe the market response may be overblown, with T-Mobile considered the least vulnerable to the satellite competition. The three major carriers have invested approximately $110 billion in low-band spectrum over the last decade—an advantage for them that SpaceX won’t easily overcome.
