SpaceX strikes spectrum deal, wins satellite approval for Starlink Mobile

The agreement turns SpaceX from a wholesale satellite partner into a credible direct competitor to US wireless carriers, and early reports indicated telecom stocks declined on the news. AST SpaceMobile is the most apparent loser, having openly sought the same licences, and its shares face a potential repricing of its spectrum position. Low-band coverage was the main technical gap in a satellite-plus-ground offering, so its introduction heightens the competitive threat to incumbents' rural and indoor coverage advantage. FCC approval remains the key hurdle for the spectrum deal and a timing risk for investors.

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SpaceX has obtained the low-band spectrum it needed to reach phones indoors and secured approval for a significantly larger direct-to-phone satellite fleet, positioning it to compete directly with US carriers.

Summary:

• SpaceX agreed to buy Grain Management's nationwide 800 MHz licence portfolio, up to 14 MHz of paired spectrum, subject to FCC approval
• No price has been confirmed; the portfolio was valued at around $6 billion when SpaceX and AST SpaceMobile were reported to be competing for it in August
• SpaceX says the low-band spectrum adds indoor coverage to its 2 GHz mid-band capacity and works with most existing phones
• The company plans to combine satellites and a ground network, calling Starlink Mobile the first operator to use both satellite and terrestrial spectrum
• The FCC separately approved 15,000 Gen2 Starlink Mobile satellites, which SpaceX says offer more than 100 times current bandwidth
• Backhaul bands were also authorised for V3 broadband satellites

SpaceX has reached an agreement to acquire a nationwide portfolio of 800 MHz spectrum licences from Grain Management, adding low-band airwaves that the company says will provide Starlink Mobile with indoor coverage and close one of the last major technical hurdles before it can function as a full US mobile carrier. The deal, announced on Thursday by Grain in a statement and reported by Reuters, covers up to 14 MHz of paired spectrum and still needs approval from the Federal Communications Commission.

The acquisition ends a contest that became public in August, when SpaceX and rival AST SpaceMobile were reported to be pursuing the same Grain licences, then valued at around $6 billion. No price for the agreed transaction has been confirmed. Grain built much of the portfolio from 800 MHz holdings that T-Mobile sold after its merger with Sprint.

The spectrum complements the 2 GHz mid-band capacity SpaceX gained through its earlier EchoStar deal. According to SpaceX, the mid-band layer handles high-bandwidth traffic while the 800 MHz layer travels farther and passes more easily through walls, reaching phones indoors. The company also says most handsets already in use support the band. Once regulators sign off, SpaceX plans to combine its satellite-to-phone constellation with a ground-based network, and it describes Starlink Mobile as the first operator to run both satellite and terrestrial spectrum on a single network.

In a separate step this week, the FCC approved Starlink Mobile's second-generation constellation, authorising SpaceX to launch 15,000 satellites designed for 2 GHz service worldwide. SpaceX claims the new satellites will deliver more than 100 times the bandwidth of the current fleet, with high-speed service directly to unmodified phones. The regulator also cleared a full range of backhaul bands for the company's V3 broadband satellites, allowing them to connect with Starlink's existing gateway network.

Taken together, the two developments move SpaceX further from its role as a wholesale satellite partner to T-Mobile and toward direct competition with established US carriers. The pace of that shift will depend on the FCC review of the Grain transaction, the build-out of the terrestrial network and the launch schedule for the new constellation.