SpaceX, the rocket and satellite company owned by Elon Musk, has spent the past month assembling the pieces of a ground-based mobile network in the United States, and each step has knocked value off US telecom shares. The company agreed on October 9 to buy low-band radio spectrum, has since signed an equipment deal with chipmaker Qualcomm, and is reported to be in talks over cell towers and over Boost Mobile, a budget US carrier.
Starlink Mobile is SpaceX’s direct-to-cell service: satellites beam a signal straight to an ordinary mobile phone, with no dish and no nearby cell tower needed. The moves of the past month all address the same gap — the ground leg: terrestrial airwaves, towers and the radios to run them.
Key facts
- SpaceX agreed to buy radio airwave licences from Grain Management, an investment firm, according to a filing with the Federal Communications Commission (FCC) reported by CBS News. The deal still needs FCC approval.
- The licences include up to 14 megahertz of paired spectrum in the 800 MHz band — “paired” meaning separate channels for sending and receiving — per The Verge.
- SpaceX said the purchase will let Starlink Mobile “become a major mobile carrier in the U.S.” by combining satellite-to-phone transmissions with a terrestrial deployment, per CBS News.
- SpaceX is in talks to access at least 80,000 cellular sites — roughly half the 158,500 cell towers currently operational in the United States, per Reuters — to establish a fourth major US wireless carrier, Bloomberg News reported, citing people familiar with the matter.
- Qualcomm’s Dragonwing technology will be deployed at “tens of thousands” of 5G cell sites under a multi-year deal, with first deployments set for 2027, The Verge said.
- SpaceX has not publicly confirmed the reported carrier plans, Reuters reported.
Why it matters
For readers tracking satellite internet, this is the point where Starlink stops being only a dish-and-router service and starts aiming at ordinary phones. SpaceX president Gwynne Shotwell and Musk said on the company’s first earnings call that the plan is to build the terrestrial side of the network and “acquire quite a few” of the customers now subscribed to T-Mobile, AT&T and Verizon, The Verge reported.
The spectrum deal
800MHz terrestrial spectrum
Low-band airwaves carry further and pass through walls, which is precisely what the tower-to-phone leg of the network needs: signals sent between a satellite and a handset are weakened by walls, roofs and other structures, CBS News reported. Musk wrote in a social media post: “This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America.”
2GHz satellite spectrum
The satellite leg is further along. The FCC has approved Starlink Mobile’s application to launch 15,000 satellites in the 2GHz band that connect directly to mobile phones, CBS News said. SpaceX bought that 2GHz spectrum from satellite operator EchoStar, and Shotwell said those licences also carry terrestrial rights the company intends to use, per The Verge.
Towers, and a possible carrier deal
Crown Castle talks
SpaceX is in talks with Crown Castle Inc., one of the largest US cell tower owners, and plans to pair a tower network with its direct-to-cell constellation, The Verge reported.
Boost Mobile talks
Separately, The Washington Post reported talks over Boost Mobile that would involve either acquiring the carrier or accessing its network, with Musk discussing the matter last month with Charlie Ergen, chairman of Boost parent EchoStar. Because Boost Mobile’s network currently runs on T-Mobile and AT&T, SpaceX may need permission from those two carriers to launch a service through it, the outlet noted.
The two reported routes describe different businesses: the Post’s version buys into an existing carrier, while Bloomberg’s has SpaceX building a fourth carrier of its own on leased towers.
Market reaction
Shares moved on both announcements. After the spectrum news, T-Mobile fell $18.58, or 11%, to $152.72 in morning trading, while AT&T slipped $1.83, or 7.4%, to $22.76, CBS News reported.
When the tower report landed, AT&T dropped 5.6% to its lowest level in more than three months, T-Mobile fell 5%, Verizon declined 1.6% and Deutsche Telekom lost 3.2%, according to Reuters in a report carried by News.az. Tower companies went the other way: Crown Castle surged 11.6%, American Tower rose 4.9% and SBA Communications gained 4.6%.
What analysts say is still missing
Bernstein analysts said in a note that the competitive impact may still be years away, but that anticipation alone, reinforced by each spectrum and infrastructure move, is likely to remain an overhang on sector sentiment, Reuters reported. They also said an MVNO arrangement with SpaceX might not appeal to existing telecom companies, and that carrier attempts at a common stance have done little to calm the market.
That assessment sits alongside the pushback from Deutsche Telekom and T-Mobile, where Deutsche Telekom’s chief executive has questioned the project’s cost.
What this doesn’t cover
None of these reports gives a price for a Starlink Mobile plan, and all of them concern the United States — nothing in them describes availability or licensing in Africa or any other market.
Frequently Asked Questions
Would Starlink Mobile require buying a new phone?
UBS analyst John Hodulik told investors in a note quoted by CBS News that the airwaves SpaceX is acquiring are compatible with existing handsets, and that he does not foresee obstacles to regulatory approval. He added that scaling the wireless business will still take time.
How much could building the Starlink Mobile network cost?
Tim Höttges, chief executive of Deutsche Telekom, the German group that owns more than half of T-Mobile, said he takes SpaceX’s plans very seriously but that pulling them off could cost Musk more than $200 billion, according to The Verge. No cost figure has come from SpaceX itself in these reports.
Have SpaceX and the tower companies commented on the reports?
Reuters, in a report carried by News.az, said SpaceX and the tower operators involved did not immediately respond to requests for comment. A Crown Castle executive said on an earnings call that he would not discuss customer specifics but that the company is talking to all parties, according to The Verge.
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