SpaceX buys spectrum to make Starlink major US mobile carrier
What's the story
SpaceX has announced a major development in its telecommunications strategy. The company has acquired a nationwide low-band 800MHz spectrum portfolio, from digital infrastructure firm Grain Management LLC. This move will allow the Elon Musk-led company to use its Starlink satellites for mobile phone services in the US. The acquisition sent shares of major mobile phone service providers plummeting by as much as 8% in after-hours trading.
Strategic move
Spectrum acquisition
Musk took to X to announce the acquisition, calling the low-band spectrum "the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America."
The move comes after Bloomberg News reported in August that SpaceX was one of the companies interested in this spectrum.
Market reaction
Telecom stocks take a hit
The announcement of the spectrum acquisition had a major impact on the stock market.
Shares of AT&T Inc. fell by 7.3%, while T-Mobile US Inc. and Verizon Communications Inc. saw their shares drop by 6.6% each in after-hours trading on Thursday evening in New York City.
Meanwhile, SpaceX's shares rose 1.5% during the same period, highlighting a significant shift in investor sentiment following Musk's announcement about Starlink Mobile services via satellites for phones across America.
Future plans
Integration with terrestrial network
Once approved by the Federal Communications Commission (FCC), SpaceX plans to integrate its satellite-to-cell services with a terrestrial network.
This combination would provide connectivity for devices across the US.
The new spectrum, acquired from Grain, will enable SpaceX to offer cell service that can penetrate walls and provide indoor coverage.
The 800MHz-band licenses became available after Grain completed a spectrum swap with T-Mobile in August.
Enhanced capabilities
Major milestone for SpaceX
The acquisition of the low-band spectrum license portfolio will significantly enhance Starlink Mobile's capabilities as a telecom operator in the US.
The existing global 2GHz mid-band spectrum will ensure high-bandwidth capacity for users, while the new low-band spectrum will help their signal penetrate through obstacles effectively.
This strategic move marks a major milestone in SpaceX's journey toward becoming a major player in the telecommunications industry.