On Thursday, SpaceX announced its agreement to purchase a spectrum portfolio from Grain Management, which includes up to 14 megahertz of paired spectrum in the 800 MHz band. This acquisition is crucial for SpaceX's Starlink service as it aims to establish itself as a significant mobile carrier in the U.S.
Following the announcement, shares of AT&T, Verizon, and T-Mobile fell in extended trading, reflecting investor concerns about increased competition. SpaceX CEO Elon Musk emphasized the importance of this deal, labeling it a 'very big deal.' The move comes shortly after T-Mobile, AT&T, and Verizon formed a joint venture to enhance coverage in underserved areas, notably without including Starlink.
Industry expert Tim Farrar pointed out that while this spectrum acquisition intensifies competition, the amount of spectrum is limited, and SpaceX would need to deploy ground towers for effective urban coverage. Additionally, the Federal Communications Commission (FCC) is set to vote on proposals that could further benefit SpaceX and other satellite service providers like Amazon.
SpaceX, valued at over $2 trillion following its record IPO in June, relies heavily on Starlink for profitability, especially as its rocket business faces challenges. The company's shares saw a slight increase of about 2% in after-hours trading after a 4% drop during regular hours, indicating mixed investor sentiment amid these developments