Wells Fargo has opened formal coverage on AT&T, Verizon and T-Mobile with a guarded sector view centered on the competitive implications of SpaceX's Starlink. The bank's work, led by analyst Steven Cahall, highlights the possibility that Starlink could disrupt fixed wireless access (FWA) growth and the postpaid account expansion the carriers have historically relied upon.
Ratings and price targets
Cahall launched coverage with the following positions: AT&T was started at Underweight with an $18 price target; Verizon was initiated at Equal Weight with a $43 price target; and T-Mobile was initiated at Equal Weight with a $170 price target. Among the three names, Wells Fargo identified Verizon as its preferred telco under coverage.
Starlink MVNO probabilities and carrier exposure
Wells Fargo quantified the odds of a Starlink MVNO partnership differently across the carriers. Cahall assigned a 20% probability that AT&T would enter a Starlink Mobile MVNO agreement, 30% for T-Mobile, and 40% for Verizon. The bank judged AT&T to be "least likely to strike a Starlink Mobile MVNO" and therefore "most exposed to satellite competition," calling it "most at-risk to net add and PP account share loss."
For Verizon, Cahall argued the company stands to both lose and gain materially from a potential MVNO arrangement with Starlink, applying the highest probability to such a deal. He estimated a Verizon-Starlink MVNO could be "mid-to-high single digit percentage accretive to EBITDA/EPS by 2032."
On T-Mobile, Wells Fargo noted the carrier's historical role as the industry's share gainer but flagged two shifting dynamics that could curb postpaid account net adds: Verizon potentially becoming "less of a wireless share donor" and an overall reduction in industry growth driven by Starlink. Cahall also observed a 30% probability for a T-Mobile MVNO and said the company's own success could lead it to conclude a partnership offers insufficient value.
Industry outlook
Across the trio, Wells Fargo expects Starlink's capacity growth - tied to Starship V3 launches - to exert downward pressure on fixed wireless access net adds industry-wide by 2028. That projection underpins the cautious tone of the coverage and informs the differentiated risk assessments and price targets assigned to each carrier.
Implications
- Wells Fargo's coverage frames Starlink as a meaningful competitive variable for telecommunications incumbents, with potential consequences for subscriber growth and profitability metrics.
- The bank's probability assignments and valuation impacts reflect varying strategic openness among carriers to a Starlink MVNO partnership.