SpaceX agreed to buy a nationwide spectrum portfolio from Grain Management to expand Starlink into the U.S. mobile market, sending shares of AT&T, Verizon and T-Mobile down in extended trading. The deal still needs approval from the Federal Communications Commission.
SpaceX spectrum deal rattles carriers
SpaceX announced an agreement on Thursday to purchase a nationwide spectrum portfolio as it pushes its Starlink service deeper into the U.S. telecommunications market. Shares of AT&T, Verizon and T-Mobile tumbled in extended trading as a result.
The deal involves acquiring a spectrum portfolio from Grain Management, a firm that specializes in digital infrastructure, and is subject to approval by the Federal Communications Commission. SpaceX described it as a license portfolio of up to 14 megahertz of paired spectrum in the 800 MHz band.
SpaceX said the 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 CEO Elon Musk called the agreement a major deal in a post on X.
Carriers had already moved to box out Starlink
Last week, T-Mobile, AT&T and Verizon formed a joint venture focused on expanding coverage in underserved areas through satellite and direct-to-device services, and Starlink was notably absent from that arrangement. T-Mobile has also previously removed mention of Starlink from its T-Satellite promotions.
TMF Associates' Tim Farrar, an industry expert, said: "This adds fuel to the fire in the battle between SpaceX and the mobile operators". But he added that the spectrum amount remains limited, and SpaceX would still need ground towers to achieve reliable building penetration in urban areas.
Regulators weigh more spectrum for satellite services
The announcement comes a day after the FCC said it would vote on a proposal to auction 25 megahertz of "prime spectrum" to support direct-to-device services from satellites to smartphones. The FCC also said it would vote Oct. 29 on taking public comment on a proposal to make an additional 482 MHz of spectrum available for supplemental coverage from space. Both proposals could benefit SpaceX as well as Amazon, which has also moved to build a service with satellite networks.
SpaceX went public in June in a record IPO and is now valued at over $2 trillion, with Starlink standing as its only profitable business segment to date. The company has reduced its planned cadence of rocket launches for next year as it works to make its Starship rockets reliable and fully reusable. SpaceX shares rose about 2% in extended trading after dropping 4% during regular market hours.
Source: CNBC
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