Markets
Verizon and AT&T Had Their Worst Days in More Than 20 Years After SpaceX Bought Mobile Spectrum
T-Mobile fell 13.3%, AT&T 10.8% and Verizon 10.1% on October 9 after SpaceX agreed to buy low-band spectrum for a planned Starlink Mobile service. Tower owners went the other way, with Crown Castle up 15.6%.
The three big US wireless carriers have spent years competing mostly with each other. On Friday, October 9, investors started pricing in a fourth. SpaceX said it had agreed to buy low-band spectrum in the 800 MHz range — up to 14 MHz of paired airwaves — from Grain Management, to support a planned Starlink Mobile service. The companies didn't disclose the price; The Wall Street Journal reported about $8 billion in cash. The deal still needs approval from the Federal Communications Commission.
The reaction was historic. Verizon fell 10.14% to $41.65, its worst day since July 2002, after trading as low as $40.81. AT&T lost 10.82% to $22.18, its worst day since December 2000. T-Mobile dropped 13.27% to $148.58, its lowest close since November 2023. Cable companies, which also sell mobile plans, fell too: Charter lost 5.74% to its lowest close since 2013, and Comcast 2.59%. Satellite-to-phone company AST SpaceMobile, a more direct rival to Starlink's existing service, fell 10.48%.
Tower owners were the mirror image. Crown Castle jumped 15.60% to $79.64, its best day since November 2008, American Tower rose 9.30% and SBA Communications 7.34%. Low-band spectrum like the 800 MHz range is usually used from towers on the ground, not just from satellites, and a new network operator would need somewhere to put its antennas. A fourth carrier is a potential new customer for the tower companies, and a potential new price competitor for the incumbents.
Not everyone thinks the threat is close. Several analysts pointed out that building a nationwide ground network takes years and enormous capital, and that the incumbents still own far more spectrum. But the market's reaction says something on its own: for decades, the carriers' high dividends and stable cash flows rested on a business with only a few players. AT&T's dividend now yields about 5% at Friday's price. Whether that is an opportunity or a warning depends on whether you think the new entrant will actually arrive.