Key insights
- SpaceX has acquired a nationwide low-band spectrum portfolio, enabling its Starlink Mobile service to directly challenge US wireless carriers. This move, pending regulatory approval, allows satellite signals to penetrate obstacles, a significant hurdle for previous satellite-based mobile networks. Investors fear increased competition could lead to price wars and reduced market share for established carriers, causing shares of T-Mobile, Verizon, and AT&T to fall in extended trading.
Oct 8 (Reuters) - SpaceX struck a deal on Thursday to acquire a nationwide low-band spectrum portfolio, positioning Elon Musk's satellite venture to mount a direct, orbital challenge to legacy wireless giants across the United States.
While Starlink Mobile's existing global 2 GHz mid-band spectrum will provide high-bandwidth capacity, the new spectrum will enable its signal to pass through obstacles. Financial terms of the agreement were not disclosed.
The move accelerates billionaire Musk's ambitions to bypass traditional wireless infrastructure and deliver cellular connectivity directly from orbit to smartphones.
Low-band frequencies are prized in telecommunications for their ability to travel longer distances and penetrate dense structures such as walls and tree cover, addressing a major technical hurdle previously faced by satellite-based mobile networks.
The transaction, which involves acquiring 100% of private-equity firm Grain Management's nationwide 800 MHz spectrum portfolio, remains subject to regulatory approval by the Federal Communications Commission.
Telecom shares fell as investors fear that competition from SpaceX could spark an aggressive price war and erode their share in the already saturated US wireless market.
Shares of T-Mobile US, Verizon and AT&T fell more than 5% in extended trading.
The Federal Communications Commission also approved Starlink Mobile's Gen2 constellation application this week, authorizing SpaceX to launch 15,000 satellites that are optimized for 2 GHz spectrum globally.
(Reporting by Akash Sriram in Bengaluru; Editing by Shilpi Majumdar)