SpaceX says Starlink is Set to become a “Major Mobile Carrier” after Spectrum Deal
By Aimee Picchi
Elon Musk’s SpaceX has agreed to buy licenses for radio airwaves that will enable its Starlink Mobile satellite business to provide cellular service inside buildings, a move the company said will allow it to “become a major mobile carrier in the U.S.”
“This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America,” Musk said in a social media post on Thursday.
SpaceX, a rocket developer and space exploration company, is buying the spectrum from investment firm Grain Management, according to a filing with the Federal Communications Commission.
Low-frequency radio spectrum can penetrate walls, overcoming an issue for Starlink’s satellites, as walls, roofs and other structures can weaken mobile phone signals.
The spectrum purchase agreement, which still needs FCC approval, would allow Starlink to combine its satellite-to-mobile transmissions with “an advanced terrestrial deployment that can seamlessly connect devices everywhere,” according to the company’s statement.
SpaceX added that the FCC has approved Starlink Mobile’s application to launch 15,000 satellites that will transmit radio waves in the 2 gigahertz band and connect directly to mobile phones.
“These airwaves are compatible with existing handsets, and we do not foresee obstacles to regulatory approval,” UBS analyst John Hodulik said in a note to investors. “That said, we still believe it will take time for SpaceX to scale its wireless ambitions, and the impact to near-term wireless industry fundamentals is limited.”
The announcement from SpaceX caused telecom companies’ shares to tumble as investors considered the potential impact of a major new industry player. T-Mobile shares slid $18.58, or 11%, to $152.72 in morning trading on Friday, while AT&T slipped $1.83, or 7.4%, to $22.76.
Shares of SpaceX gained $2.61, or 1.6%, to $163.18.
