SpaceX Spectrum Deal Hits Verizon, AT&T, T-Mobile Shares

SpaceX has taken on US mobile carriers by reaching an agreement to acquire a nationwide portfolio of low-band spectrum. Verizon, AT&T and T-Mobile each saw their stock drop roughly 6% in after-hours trading Thursday.

Private-equity firm Grain Management, the seller, had purchased those frequencies from T-Mobile in August. According to Reuters, the price SpaceX (SPCX) will pay has not been disclosed.

Why SpaceX Is Taking on US Mobile Carriers With Low-Band Airwaves

Radio frequencies used for mobile signals, known as spectrum, are divided into bands with varying characteristics. Starlink Mobile, SpaceX's satellite-to-phone offering, had previously relied on 2 gigahertz (GHz) mid-band airwaves, which are well suited for data capacity.

Low-band frequencies, however, can travel greater distances and penetrate buildings and foliage more effectively, which should improve the service's ability to get a signal indoors.

SpaceX stated that the portfolio includes up to 14 megahertz (MHz) of paired spectrum in the 800 MHz band.

Reuters also reported that the Federal Communications Commission (FCC) has separately given the green light to SpaceX's application for a 15,000-satellite Starlink Mobile Gen2 constellation.

According to CNBC, AT&T was the worst performer in after-hours trading, with a decline of almost 7%. Verizon fell by more than 6%, and T-Mobile dropped 6%.

SpaceX shares, by contrast, rose by nearly 3% during the same session.

Carrier stocks had fallen 4% in July after Semafor reported that SpaceX was looking to acquire spectrum. The same report noted that AT&T CEO John Stankey downplayed Starlink's ambitions at that time.

“The reality is that they’re coming to the game very late after this industry has been established.”

Who Held These Airwaves Before SpaceX Stepped In?

T-Mobile completed the sale of its 800 MHz portfolio to Grain on August 11. The deal brought in $2.9 billion in cash along with Grain's 600 MHz licenses.

The FCC had approved the swap on July 1.

Barely two months after that sale was finalised, SpaceX has now agreed to purchase Grain's nationwide 800 MHz holdings.

In a separate development, T-Mobile currently markets a satellite-to-phone service powered by Starlink, called T-Satellite.

That same report highlighted that the three largest carriers spent roughly $110 billion over ten years to acquire most of the low-band spectrum in the US. SpaceX has now arranged to pick up a nationwide portfolio in a single deal.