SpaceX Acquires Low-Frequency Spectrum with Massive Investment, Enters Mobile Operator Market; US Telecom Stocks Plummet

SpaceX announced the acquisition of low-frequency wireless spectrum, officially declaring its entry into the U.S. mobile carrier market. This move has put pressure on the stock prices of existing telecom giants, and the industry’s competitive landscape is facing profound restructuring.

On Thursday, SpaceX announced that it has reached an agreement with investment firm Grain Management LLC to acquire a batch of nationwide 800MHz low-frequency spectrum licenses. The company plans to integrate this spectrum with its Starlink satellite network to build an independent mobile carrier business. In a statement on its official website, SpaceX said, this spectrum “fills in the last key piece for Starlink Mobile to become a major U.S. mobile operator.” CEO Elon Musk called it a “very significant event” on X.

After the news was released, major U.S. telecom carriers’ stocks fell sharply in after-hours trading. AT&T dropped 7.3%, while T-Mobile US and Verizon Communications both declined by about 6.6% to 7%. AST SpaceMobile was also affected, down more than 6%. SpaceX shares rose approximately 1.5% to 3% after hours.

Spectrum Deal Details: Acquisition of 800MHz Licenses from Grain Management

SpaceX acquired a batch of nationwide low-frequency spectrum licenses from investment firm Grain Management LLC, with the frequency band being 800MHz. This band can penetrate walls, provide indoor signal coverage, and is compatible with most mobile devices on the market.

This batch of 800MHz licenses previously belonged to Grain Management, which obtained them through a spectrum swap with T-Mobile in August this year. According to the approval order issued by the U.S. communications regulator (FCC) for this transaction, Grain was required to openly solicit bids from interested developers for the spectrum, with a deadline of November 5. The FCC approval noted that the spectrum had long been underutilized.

According to a Bloomberg report in August, SpaceX was already one of the interested bidders for the spectrum at the time. Musk responded on X then, calling the report “inaccurate” and denying the involvement.

FCC Authorizes Constellation of 15,000 Satellites, Direct to Ordinary Phones

Shortly before the spectrum acquisition announcement, the FCC authorized SpaceX on October 7 to deploy a constellation of 15,000 satellites at an orbital altitude of 326 to 335 kilometers, which can connect directly to ordinary phones without carrier involvement.

Previously, satellite-to-phone regulatory rules required satellite operators to lease spectrum from licensed carriers, essentially giving carriers a “gatekeeper” role. The FCC’s recent exemption from these leasing requirements stated in the order: “Requiring SpaceX to enter into a lease agreement with itself would impose an unnecessary regulatory burden.” The FCC also said the authorization was intended to foster “competition in retail wireless services for U.S. consumers.”

It is noteworthy that this authorization came from a bureau within the FCC rather than a full committee vote, so it could still be reviewed. In addition, the FCC is scheduled to vote on October 29 on auctioning 25MHz of spectrum for direct-to-device services. FCC Chairman Brendan Carr has positioned the related goal as using this cutting-edge technology to eliminate mobile signal blind spots.

Commercial Rollout Still Years Away, No Satellites Yet in Orbit

Although SpaceX has obtained the licenses and secured the spectrum, commercial deployment of its direct-to-phone satellite service will still take several years. Currently, there are no satellites of this constellation in orbit, with launches planned to begin no earlier than the end of 2027. The recently acquired spectrum cannot be used for commercial purposes before the completion of subsequent transaction stages (expected by November 30, 2027, at the latest). According to FCC requirements, half of the constellation must be deployed by October 7, 2032, and all satellites must be in place by October 7, 2035.

SpaceX claims the network “will provide up to 150Mbps 5G speeds per user,” far exceeding the performance of its current direct-to-satellite services. However, as satellite beams need to share capacity over large areas, the real-world user speed under typical loads has not yet been verified.

SpaceX President Gwynne Shotwell stated that the acquired spectrum “includes a terrestrial component, and we do intend to build a terrestrial network.”

Telecom Operators and AST SpaceMobile: Short-term vs. Long-term Concerns

Faced with SpaceX’s advances, AT&T, Verizon, and T-Mobile jointly established a satellite-to-phone joint venture on October 2, indicating that the three major carriers had anticipated regulatory developments. However, the joint venture still relies on third-party satellite providers and lags behind SpaceX in terms of independence.

For AT&T and Verizon, the long-term risk exposure is greater, but short-term pressure is relatively limited, as their agreements with AST SpaceMobile are also tied to a network that is yet to be built. T-Mobile is currently a partner for SpaceX's direct-to-satellite service but will become a direct competitor in the future, and the recent FCC exemption effectively undermines T-Mobile’s bargaining position in the partnership.

AST SpaceMobile has suffered the most, falling more than 6% during the session. The core of its business model is a “carrier-friendly” approach, while SpaceX’s independent path without the need for carrier cooperation fundamentally challenges this logic. Currently, AST SpaceMobile has only 13 satellites in orbit, and is far behind SpaceX in scale and financial strength. Reportedly, SpaceX holds about $93.52 billion in cash, and Starlink subscribers have increased to 12 million.