Verizon, AT&T and T-Mobile Slide 6% as SpaceX Challenges US Mobile Carriers

US Mobile Carriers Fall as SpaceX Acquires Low-Band Spectrum

Market Reaction

In after-hours trading, Verizon, AT&T, and T-Mobile shares each fell about 6% as news of the acquisition spread. The sellers, private-equity firm Grain Management and T-Mobile, had received $2.9 billion in cash and Grain's 600 MHz licenses in August.

Why It Matters

SpaceX's acquisition of the low-band spectrum portfolio is seen as a challenge to the US mobile carriers' dominance. The radio frequencies, which carry mobile signals, are divided into bands with different strengths. Low-band frequencies travel farther and reach deeper indoors, which should help SpaceX's signal clear buildings and foliage.

Context

The Federal Communications Commission (FCC) had cleared the sale of T-Mobile's 800 MHz portfolio to Grain on July 1. SpaceX agreed to buy the portfolio from Grain less than two months later, in September. The acquisition is seen as a significant move by SpaceX, which has previously leaned on 2 gigahertz (GHz) mid-band airwaves suited to data capacity.

Impact

The acquisition of the low-band spectrum portfolio is expected to have a significant impact on the US mobile carriers. The carriers face a threat from SpaceX's latest move, which could disrupt the market and challenge their dominance. AT&T fared worst in after-hours trading, down almost 7%, while Verizon lost more than 6% and T-Mobile 6%.

Background

SpaceX has now agreed to buy a nationwide portfolio of low-band spectrum in one transaction. The move comes after the FCC approved SpaceX's application for a 15,000-satellite Starlink Mobile Gen2 constellation. SpaceX shares gained almost 3% in the same session.