U.S. wireless operators experienced notable selling pressure after SpaceX signaled an intention to deploy a full-fledged mobile service, raising the prospect of a more direct competitive threat to Verizon, AT&T and T-Mobile.
SpaceX bought 65 megahertz of wireless spectrum from EchoStar in two transactions announced last year, paying a combined $19.6 billion for the airwaves necessary to expand Starlink’s footprint. On a post-earnings call, SpaceX President Gwynne Shotwell said, "The spectrum that we purchased from EchoStar does have terrestrial components, so we definitely intend to build out terrestrial." She added the company will develop the infrastructure to make Starlink "a true mobile service" and said she expects to pull "quite a few" customers away from the Big Three carriers.
Market reaction was immediate. In premarket trading on Wednesday, shares of Verizon and AT&T each slipped by more than 2%, while T-Mobile declined about 1.3%.
The announcement marked SpaceX’s clearest statement to date that it plans to integrate its satellite network with ground-based infrastructure, broadening its current direct-to-device offering that targets areas lacking cellular coverage. The comments came alongside SpaceX’s initial earnings report as a public company.
In his first address to investors since the IPO, Elon Musk outlined ambitious targets for the company, including launching data centers in space in 2027 and aiming for $1 trillion in revenue. For the second quarter, SpaceX reported revenue of $7.8 billion, a 92% increase from the year-earlier period. The company also reported narrowed losses, although its operations were weighed down by heavy investment: capital expenditures rose to $18.4 billion from $2.8 billion a year earlier.
SpaceX's own stock moved sharply in volatile premarket trading, falling more than 10% after having priced at $135 in its IPO and climbing above $225 in the days that followed. The stock has since slipped below the IPO price, a decline that the reporting notes has erased more than $1 trillion in value from its peak.
Implications
- SpaceX’s stated plan to marry satellite service with terrestrial spectrum introduces a new competitor dynamic for national wireless carriers.
- The market responded with immediate downward pressure on carrier stocks, reflecting investor concern about potential subscriber losses and competitive pricing pressure.
- SpaceX’s rapid revenue growth is paired with substantial capital spending, demonstrating an aggressive build-out strategy that is weighing on near-term operations.