Investors hit the sell button on telecom names after SpaceX said it struck an agreement to buy spectrum, a move aimed at taking Starlink mobile. Verizon closed down 8.75%, its toughest session since July 2002. T-Mobile dropped 13.27%, its worst since 2013, and AT&T fell 9.81%, its weakest since 2000. SpaceX stock edged up around 1% on the day.
SpaceX said Thursday it plans to acquire a "license portfolio of up to 14 megahertz of paired spectrum in the 800 MHz band" from Grain Management. Brendan Carr, the FCC chair, said the FCC would be responsible for reviewing and approving the deal. In a CNBC interview, he said competition in the spectrum market was "really good news for the American consumers," adding, "We're probably going to bring over $100 billion of spectrum into the market over the next two years, so we're seeing a lot of competition." He also noted there will be plenty of jockeying as companies try to "out-compete" and "out-innovate," and that it is not the agency's role to "pick winners and losers."
Spectrum changing hands reprices every carrier that competes for it. Market Briefs covers telecom free every morning.
Wall Street watchers largely liked the strategic swing. Evercore ISI wrote that the rocket company "now has the outline of a real network" to complement its satellites. JPMorgan said the deal makes Starlink Mobile's long-term opportunity "more credible." Even so, analysts argued that in the near term the risk to U.S. wireless incumbents remains limited, because building a competitive terrestrial network demands significant time, infrastructure, and capital.
If SpaceX turns spectrum plus satellites into a real mobile contender, the wireless playbook could look different down the road. For now, even the bulls point out that building a terrestrial network is a long, expensive slog, which helps explain the sharp stock moves today and the tempered risk view for the near term. Keep an eye on how the approval process and buildout plans evolve if your holdings are tied to U.S. wireless.
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