Investment bank Oppenheimer has downgraded AT&T from 'buy' to 'perform' due to anticipated competition from satellite internet services, particularly SpaceX's Starlink, which is preparing for its IPO. Analyst Timothy Horan expressed concerns that the growth of broadband subscribers and mobile services could be jeopardized by the rise of low-earth orbit satellite constellations.
The Federal Communications Commission's recent updates to satellite spectrum-sharing rules could enhance satellite broadband access significantly, potentially increasing its market presence.
While traditional broadband providers may still perform well in the short term, Oppenheimer warns that AT&T is particularly vulnerable compared to competitors like Verizon and T-Mobile, which have less exposure to broadband.
The impending IPO of SpaceX, expected to be priced at $135 per share and aiming for a $1.75 trillion valuation, could further spotlight the risks facing AT&T and the broader telecommunications sector