Shares of the leading US telecom operators saw a decline in after-hours trading following an announcement from SpaceX regarding a major acquisition aimed at launching its own mobile network.
As of 02:45 GMT on Friday, AT&T, Verizon, and T-Mobile, the three giants in the American market, reported drops of 6.47%, 5.46%, and 5.99%, respectively.
SpaceX disclosed that it acquired a portfolio of low-band licenses necessary for providing extensive and continuous mobile coverage across the United States.
A $8 Billion Deal
In conjunction with this announcement, investment firm Grain Management confirmed that it was the seller of these licenses, with the Wall Street Journal estimating the transaction’s value at $8 billion.
This deal “removes one of the last key obstacles to transforming Starlink Mobile into a significant mobile operator in the United States,” SpaceX stated.
Starlink Mobile is a subsidiary of the Starlink satellite network, which is also a branch of SpaceX, already providing high-speed internet access in the United States and several other countries.
Elon Musk, CEO of SpaceX, referred to the acquisition as “a big day for Starlink Mobile” on social media platform X.
He added, “It may sound extremely crazy, but I see a path where SpaceX could be valued by several orders of magnitude more than the current economy of Earth,” said the world’s richest person.
“I Expect to Capture a Good Portion of Their Customers”
During SpaceX’s first quarterly earnings presentation in August, President Gwynne Shotwell anticipated a launch for Starlink Mobile by the end of 2027.
Until now, many observers viewed this new operator as likely to be a marginal player in the US mobile market, primarily attracting interest from residents in underserved areas.
However, SpaceX claims to target all Americans, “from densely populated cities to the most remote rural communities.”
“I expect to capture a good portion of their customers, as I believe our service will be superior,” Shotwell had predicted last August.
There Are Skeptics
At the end of September, AT&T’s CEO John Stankey labeled SpaceX’s plan as “a non-viable strategy.”
“I don’t see how Starlink Mobile could become a significant player in the mobile market without building a terrestrial network, which is extremely costly,” said Anshel Sag, an analyst at Moor Insights & Strategy.
SpaceX is still awaiting approval from the Federal Communications Commission (FCC). Once the green light is obtained, it plans to combine its satellite network with advanced terrestrial infrastructure.
“Starlink and SpaceX have yet to fully explain how they will build their terrestrial network,” Sag cautions.
In September, Verizon’s CEO Dan Schulman stated that he does not view Starlink Mobile as a “direct competitor,” asserting that in urban environments, terrestrial networks are “100 times, sometimes a thousand times more efficient.”
