By SpaceX SPCX shares rose close to 2% in premarket trading on Friday as Elon Musk’s satellite company moved closer to a potential expansion into nationwide wireless services, a move that could intensify competition for established US telecom operators.
The company is reportedly in talks with cellular infrastructure providers to secure access to at least 80,000 cell sites across the country, according to Bloomberg.
The effort would combine Starlink’s satellite connectivity with ground-based infrastructure, bringing SpaceX closer to its ambition of becoming a fourth nationwide wireless carrier.
The reported discussions have also stirred activity across the telecom sector, lifting shares of major tower operators while putting pressure on established mobile carriers.
Why SpaceX is rising?
SpaceX is looking to combine its Starlink direct-to-device network with terrestrial cellular infrastructure to create a more comprehensive wireless service.
Bloomberg reported that the company is negotiating with at least one major cellular infrastructure provider, citing people familiar with the discussions.
The potential agreements could be worth billions of dollars.
Crown Castle is among the companies involved in the discussions, alongside other major US tower owners such as American Tower and Vertical Bridge Holdings.
The move builds on SpaceX’s efforts to expand Starlink beyond traditional satellite broadband.
The company recently received Federal Communications Commission approval to launch 15,000 satellites designed to connect directly to mobile phones.
Combined with its spectrum holdings and access to ground-based sites, the satellite network could allow SpaceX to offer broader mobile connectivity and challenge established wireless providers.
What analysts are saying?
Analysts have become more optimistic about SpaceX’s prospects, pointing to the potential for Starlink Mobile to open a new growth avenue.
Bank of America Securities raised its SpaceX price target to $275 from $235 on October 22, maintaining a Buy rating.
JPMorgan reiterated its Overweight stance, saying the reported cell-site negotiations make the long-term opportunity for Starlink Mobile “more credible.”
The bank also acknowledged that building a competitive terrestrial network would require substantial capital.
PhillipCapital went further, upgrading the stock two notches to Buy from Sell and lifting its price target to $250 from $75. The firm cited unexpectedly strong gains in SpaceX’s AI business.
How the news is affecting other stocks?
The prospect of a new nationwide competitor has produced sharply different reactions across the telecom industry.
Crown Castle shares surged nearly 13% in premarket trading, while American Tower gained more than 10%.
Investors appeared to respond positively to the possibility that infrastructure agreements with SpaceX could generate substantial business for tower operators.
By contrast, shares of AT&T fell around 5%, Verizon declined approximately 4.5%, and T-Mobile dropped over 5% before the opening bell.
The declines reflect concerns that SpaceX could eventually compete with the established carriers by combining satellite connectivity with conventional cellular infrastructure.
A nationwide service could put pressure on incumbents to defend customers, pricing and market share.
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