SpaceX cell sites talks sink AT&T and T-Mobile shares
A report that SpaceX wants access to at least 80,000 U.S. towers for a fourth national carrier knocked about $28 billion off phone companies and lifted tower owners.
The race for SpaceX cell sites has turned into a fresh headache for America's wireless incumbents. Shares of AT&T, T-Mobile and Verizon fell on Friday, Oct. 23, after Bloomberg News reported that Elon Musk's company is in talks to secure access to at least 80,000 U.S. cell sites, a step toward building a fourth nationwide carrier from scratch.
What happened
Reuters reported that AT&T dropped 5.6% to its lowest in more than three months, T-Mobile lost 5% and Verizon slipped 1.6% during the session. Yahoo Finance put the closing losses for AT&T and T-Mobile at more than 7% each. Deutsche Telekom, which owns more than half of T-Mobile, fell 3.2% in Europe.
Tower owners moved the other way. Crown Castle, named in the Bloomberg report as one of the infrastructure companies in talks with SpaceX, rose as much as 11.6% and closed 9% higher at its best level since June. American Tower and SBA Communications also gained. Yahoo Finance estimated that the carriers lost nearly $28 billion of market value on the day while tower stocks added about $7 billion.
Nothing has been signed. The discussions are still some way from a formal lease, according to the reports, and SpaceX shares themselves rose 1.7%.
Why it matters
The scale of the request is what rattled investors. Eighty thousand sites equals roughly half the 158,500 towers in the United States, according to the Wireless Infrastructure Association, cited by Yahoo Finance. American Tower has about 41,000 sites in the U.S. and Canada and Crown Castle about 40,000.
It is the second shock this month. SpaceX struck a deal on Oct. 9 to buy nationwide airwaves for about $8 billion, sending the carriers down by double digits. Since that deal, Crown Castle is up 25% and AT&T down 16%, Yahoo Finance said. The company has been widening its ambitions, from the Tesla merger committees to traders' merger odds.
Analysts at Bernstein wrote that "the competitive impact may still be years away," but that anticipation alone "is likely to remain an overhang on sector sentiment." For towers, SpaceX cell sites would mean a large new tenant; AT&T, Verizon and T-Mobile currently provide about 85% of American Tower's U.S. and Canada revenue.
What's next
American Tower reports earnings on Tuesday, a chance for management to say whether SpaceX is a prospective customer. Crown Castle chief executive Chris Hillabrant said on his company's call that "you can assume that we're talking to all parties." Some analysts see the talks as leverage in negotiations with carriers, and better satellites could reduce how many towers SpaceX needs, Yahoo Finance noted.
The Reuters account of the telecom selloff notes that a true rival would still need years of work and a terrestrial network. A signed deal for SpaceX cell sites would be the clearest sign that the plan is moving from spectrum to steel.
The call
We say SpaceX will not sell a U.S. mobile phone plan with its own phone numbers, voice and data by June 30, 2027. Polymarket's "SpaceX becomes a US mobile carrier by June 30, 2027?" market put that No outcome at 86% at 08:21 MSK on Oct. 25: leasing towers, building a network and launching service in about eight months is a tall order, even for SpaceX.
This article is for information only and is not investment advice. Calls are editorial forecasts, logged with market odds at the time of publication and kept on the record.