SpaceX negotiates access to 80,000 U.S. cell towers, rattling telecom stocks

NEW YORK, October 23.— Shares of the largest U.S. wireless carriers fell on Friday after reports that SpaceX is negotiating access to at least 80,000 cell towers to build its own wireless network from scratch, according to Bloomberg News late Thursday, citing sources familiar with the matter.

AT&T lost 5.6% to a more than three-month low, Verizon fell 1.6% and T-Mobile shed 5%; in Europe, Deutsche Telekom, which owns more than half of T-Mobile, dropped 3.2%. On the other side of the market, tower operators surged: Crown Castle jumped 11.6% after being identified as one of the companies in talks with SpaceX; American Tower gained 4.9% and SBA Communications added 4.6%, according to Reuters.

Bernstein analysts said the competitive impact may be years away, but anticipation alone will keep pressure on the sector. The report comes weeks after SpaceX acquired low-band spectrum, with Federal Communications Commission (FCC) approval, to advance its plans to become the fourth national carrier in the United States.

Elon Musk has said the company will build terrestrial networks to deliver broad-based connectivity wherever it is allowed to operate. Starlink already earns revenue from internet service in rural and sparsely populated areas, and its direct-to-cell mobile service tops 22 million monthly users. Becoming a true rival to the legacy giants will require years of work and a terrestrial network, analysts say.

Photo: Drive Tesla Canada

Source: Reuters