Elon Musk has his sights set on your phone bill, and telecom investors aren't thrilled. SpaceX agreed to buy a nationwide 800 MHz spectrum portfolio from Grain Management, bringing Starlink a step closer to becoming a mobile carrier. The prospect of Musk crashing another industry was enough to send telecom stocks tumbling across the US and Europe.
Sudden static: Low-band spectrum is valuable real estate for mobile carriers. Its signals travel farther and penetrate buildings better, making it essential for reliable coverage. SpaceX just snapped up as much as 14 MHz of paired spectrum to add to its existing mid-band and high-band holdings. And Morgan Stanley thinks Musk's shopping spree may be far from over.
- Verizon, T-Mobile, and AT&T all took a hit, with Verizon heading for its worst trading day since 2002.
- While telecom giants took a beating, satellite operators like Viasat rallied as investors bet spectrum holdings could make them attractive takeover targets.
Starlink's Threat Has a Long Wait
Citi analyst Michael Rollins thinks Wall Street may be getting ahead of itself. He sees room for telecom stocks to recover over the next year as customers keep their phones longer and switch carriers less often, helping cash flow and dividends. And he doesn't expect SpaceX to make a meaningful dent in the big three's results before 2029. Raymond James analyst Ric Prentiss agrees there's a long road ahead, with SpaceX still facing major hurdles to building a competitive network.
- Tower owners American Tower and Crown Castle rose 7% and 7.8% premarket on terrestrial infrastructure demand.
- Regulators cheered the competition, with over $100B of spectrum expected to hit the market within two years.
Hold the phone: SpaceX isn't hiding its ambitions, either. Chief operating officer Gwynne Shotwell expects Starlink to take market share from the big carriers, and the company already has approval for 15K Gen2 satellites. But building a network that can actually compete will take years of launches, regulatory approvals, and ground infrastructure. For now, traditional carriers still have millions of customers paying their monthly bills.
