SpaceX stock is muscling in on US telecom territory and it’s rattling the shares of top US communications giants on Friday.
SpaceX jumped as much as 4%, riding a wave of bullishness following an announcement on Thursday that the company had reached a deal to acquire the nationwide rights to a block of low frequency airwaves, a development Musk described as a “very big deal” in a post on X.
“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 stated in its announcement.
The company said that once it receives regulatory approval, it plans to deploy a hybrid network combining its satellite and ground technology that will allow it to significantly scale device connectivity. This comes as global reliance on Starlink has grown significalty in recent years.
The news that SpaceX could expand its network to more US users sent shares of major telecom companies tumbling.
Here were the big intraday moves:
Germany’s Deutsche Telekom, the majority owner of T-Mobile, and Spain’s Telefónica were down 8% and 4% respectively in European trading.
Wall Street analysts see the deal as a major step forward for SpaceX as the company maneuvers to become the dominant satellite connectivity provider, building what it describes as “the world’s most advanced mobile network.”
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“The transaction demonstrates that SpaceX is serious about entering the US Mobile market with the acquisition of up to 14 MHz of low-band spectrum (800 MHz) that will help fill out its network and go beyond the largely fringe case of direct-to-device for filling in dead zones,” wrote Morgan Stanley analyst Sean Diffley.
Gene Munster, a managing partner at Deepwater Asset Management, said that he sees even bigger things on the horizon for SpaceX, a company that he’s been a highly bullish on since before its June IPO.
Munster addressed the news by stating that he expects the company’s telecom aspirations to eventually grow to even compete with companies like Apple and Samsung.
“Elon says he doesn’t want to make a phone,” Munster noted. “I still think [SpaceX}eventually will. A vertically integrated handset on a Starlink mobile network could deliver features carriers can’t match, and cheaper service.”