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SpaceX agreed to acquire a nationwide low-band spectrum portfolio from Grain Management, causing shares of AT&T, Verizon and T-Mobile to drop significantly.
SpaceX announced an agreement to purchase a nationwide spectrum portfolio from Grain Management, a firm specializing in digital infrastructure. The deal involves a license portfolio of up to 14 megahertz of paired spectrum in the 800 MHz band and is subject to approval by the Federal Communications Commission (FCC). The announcement caused shares of major U.S. telecommunications companies to decline sharply on Friday.
Following the news, stock prices for traditional mobile carriers fell significantly. According to Yahoo Finance, T-Mobile (TMUS) declined by 13%, AT&T (T) dropped by nearly 9%, and Verizon (VZ) fell 8%. Conversely, SpaceX shares rose about 2% in extended trading after dropping 4% during regular market hours. Tower infrastructure companies saw gains, with Crown Castle rising approximately 15.6%, American Tower increasing about 9.3%, and SBA Communications gaining around 7.3%.
KuCoin reported that the deal is reportedly worth approximately $8 billion, though SpaceX and Grain Management did not disclose the transaction amount in their statements. The market reaction reflects concerns that SpaceX could disrupt the wireless telecom space by combining satellite and ground-based coverage.
SpaceX stated that the acquisition addresses a key technical gap for its Starlink Mobile service. "This prime low-band 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 said in a statement. The company intends to connect its satellite-to-mobile constellation with an advanced terrestrial network to reach customers through walls and buildings.
SpaceX CEO Elon Musk described the agreement as a "very big deal" in a post on X. In a separate post, he stated, "This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America."
Industry expert Tim Farrar of TMF Associates noted the limitations of the deal. "This adds fuel to the fire in the battle between SpaceX and the mobile operators," Farrar said. "But it's still a very limited amount of spectrum and to get reliable building penetration in urban areas SpaceX would have to deploy towers on the ground."
The announcement follows a joint venture formed last week by T-Mobile, AT&T and Verizon to expand coverage in underserved areas via satellite and direct-to-device (D2D) services, a venture from which Starlink was absent. Additionally, the FCC announced it would vote on a proposal to auction 25 megahertz of "prime spectrum" to support D2D services, as well as a proposal to make an additional 482MHz of spectrum available for supplemental coverage from space.
SpaceX COO Gwynne Shotwell previously stated that the company plans to build a terrestrial wireless network and target customers of major carriers. "I anticipate us to be able to acquire quite a few of their [AT&T, Verizon, and T-Mobile's] customers because I think our service will be better," Shotwell said on an earnings call in August.
This acquisition signals SpaceX's intent to compete directly with established telecommunications giants in the U.S. mobile market. While the spectrum purchase is a significant step, it requires regulatory approval and the construction of ground-based infrastructure to fully realize its potential for indoor and urban coverage. The market's sharp reaction highlights the perceived threat SpaceX poses to the existing business models of AT&T, Verizon and T-Mobile.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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