SpaceX buys nationwide low-band spectrum, and US telco shares fall
SpaceX agreed on Thursday to buy a nationwide 800 MHz low-band portfolio from Grain Management, with financial terms undisclosed. Shares of T-Mobile US, Verizon and AT&T fell in after-hours trading, and the deal still needs FCC approval.
The deal
SpaceX agreed on Thursday, 8 October, to acquire 100% of the nationwide 800 MHz spectrum portfolio held by private-equity firm Grain Management. Financial terms were not disclosed. Grain had acquired the airwaves from T-Mobile earlier this year. The transaction remains subject to approval by the Federal Communications Commission, which sells the spectrum licences. SpaceX said the holdings include up to 14 megahertz of paired spectrum, and that the low band will form a "coverage layer" letting Starlink Mobile signals penetrate walls and buildings. Starlink Mobile already uses a global 2 GHz mid-band spectrum for high-bandwidth capacity, which the new low-band holdings are meant to complement.
- Grain Management acquires the airwaves from T-Mobile
- SpaceX pays $17bn to buy wireless spectrum licences from EchoStar
- FCC approves Starlink Mobile's Gen2 constellation application for 15,000 satellites
- SpaceX announces the low-band spectrum acquisition in a statement
- Shares of T-Mobile US, Verizon and AT&T fall in extended trading
Why the low band matters
Low-band frequencies travel longer distances and pass through dense structures such as walls and tree cover, a technical hurdle that previously limited satellite-based mobile networks. Most existing, unmodified mobile handsets already support the 800 MHz band, so customers would not need proprietary satellite phones, Reuters reports. Bernstein analysts wrote in a note that buying spectrum is not a commitment to build a nationwide network, but that it makes that option more credible and less expensive.
SpaceX described the combined architecture in its own words:
With this new low-band spectrum and our Gen2 constellation, Starlink Mobile can now become the first network operator to deploy both satellite and terrestrial spectrum.
Once the FCC gives final approval, SpaceX plans to combine its satellite-to-mobile constellation with a terrestrial mobile network, which would compete directly with T-Mobile, AT&T and Verizon.
Market reaction
Shares of the incumbent carriers fell in after-hours trading on Thursday. The Financial Times reported drops of 7% at Verizon, 7.5% at AT&T and 6.7% at T-Mobile US. Other outlets gave different figures: Handelsblatt said each of the three fell by more than 5%, while RP put AT&T at about 7% at times and T-Mobile US and Verizon at more than 6%. Handelsblatt also reported that investors fear an aggressive price war in the already saturated US mobile market. SpaceX shares rose 2.7% in after-hours trading, according to the Financial Times, and Musk called the deal a "very big deal" in an X post.
- AT&T
- 7.5 %
- Verizon
- 7 %
- T-Mobile US
- 6.7 %
Regulatory path and background
This week the FCC approved Starlink Mobile's Gen2 constellation application, authorizing 15,000 satellites optimized for 2 GHz spectrum globally. The new fleet will operate in very low Earth orbit and deliver expanded bandwidth to standard handsets. SpaceX says the V2 satellites will offer more than 100 times the bandwidth of the current generation. SpaceX paid $17bn last year for wireless spectrum licences from EchoStar, according to the Financial Times. Starlink already offers limited direct-to-consumer services in the US, and telcos such as T-Mobile use its satellites to augment rural coverage. Starlink provides high-speed internet in about 160 countries, and SpaceX's initial public offering took place in June.
