AT&T shares fell nearly 7%, Verizon dropped about 5%, and T-Mobile fell more than 6% in premarket trading on Friday, according to reports. The portfolio includes up to 14 megahertz of paired spectrum in the 800 MHz band. The companies have not disclosed the financial terms, although The Wall Street Journal reported that SpaceX had agreed to pay $8 billion for the spectrum. The transaction is subject to approval from the Federal Communications Commission (FCC). SpaceX intends to combine the newly acquired spectrum with its satellite network and terrestrial infrastructure to expand mobile coverage, including in areas with weak cellular signals. The company also said most existing devices already support the 800 MHz band, potentially letting customers access the service without buying new phones. AT&T CEO John Stankey previously described direct-to-cell satellite technology as “solving the last 2%, not trying to come up with a new way to solve the 98%.
SpaceX said the acquisition would help address a technical limitation in its plans to expand Starlink Mobile. “This prime low-band spectrum addresses one of the key remaining technical gaps that will pave the way for Starlink Mobile to become a major mobile carrier in the US,” SpaceX said. The 800 MHz band travels farther and penetrates walls and buildings more effectively than higher-frequency spectrum. However, compatibility with individual devices when Starlink Mobile launches remains unclear. SpaceX CEO Elon Musk called the acquisition a “very big deal” in a post on X. SpaceX’s agreement comes as the FCC considers proposals to make more spectrum available for satellite-to-device services. The company has also received approval for plans to launch 15,000 next-generation Starlink Mobile satellites, which it says will offer more than “100 times the bandwidth of our current generation” to unmodified devices. SpaceX has signalled its intention to compete directly with established mobile operators. During an August earnings call, company COO Gwynne Shotwell said the service could attract customers from AT&T, Verizon, and T-Mobile. “I anticipate us to be able to acquire quite a few of their [AT&T, Verizon, and T-Mobile’s] customers because I think our service will be better,” Shotwell said. The proposed expansion has highlighted the limitations of satellite-based connectivity. He also warned that it would be difficult to compete with existing infrastructure. Verizon CEO Dan Schulman similarly said that “satellite to effectively compete against a terrestrial network in either mobility or broadband in urban and suburban geographies” would face physical limitations.
The announcement raised investor concerns that Starlink could compete in the US wireless market. Meanwhile, SpaceX’s shares rose in premarket trading after falling during the latest session. The company has been developing its satellite-to-mobile services and plans to expand connectivity beyond areas served by traditional cellular networks. SpaceX has agreed to acquire a portfolio of wireless spectrum licences from Grain Management, an investment firm specialising in digital infrastructure. You use AI every day. Now get your AI Quotient. Take the AIQ test.
Shares of the three major American telecom companies declined after SpaceX announced the agreement on Thursday.
The agreement includes up to 14 megahertz of paired spectrum in the 800 MHz band and is subject to Federal Communications Commission (FCC) approval. The deal would help fill a technical hole in SpaceX’s plans to expand Starlink Mobile into a major US wireless service, the company said. Elon Musk ‘s SpaceX has struck a deal that could reshape competition in the US telecom industry. The company has agreed to acquire a nationwide low-band spectrum portfolio from investment firm Grain Management, sending the shares of three of the biggest American telecom companies, AT&T, T-Mobile and Verizon, lower in premarket trading. Lower-band spectrum travels farther and penetrates buildings better than higher-frequency signals, which can improve connectivity in areas with poor cellular coverage. The deal comes as SpaceX moves to compete directly with established mobile operators, raising investor concerns about its potential impact on the three telecom companies.