Verizon, AT&T and T-Mobile were hit after SpaceX outlined a broader wireless push, though T-Mobile CEO Srini Gopalan said satellite service is still likely to complement rather than replace terrestrial networks.
Telecom stocks fell after SpaceX outlined a bigger push into mobile service, putting Verizon, AT&T and T-Mobile in focus as investors weighed the prospect of new competition in U.S. wireless. SpaceX President Gwynne Shotwell said on Tuesday's earnings call that Starlink Mobile will begin service at the end of 2027 and that she expects to win "quite a few" customers from AT&T, Verizon and T-Mobile. The shares rebounded Thursday, with T-Mobile up 3.75%, AT&T gaining 2.82% and Verizon rising 1.12%. T-Mobile CEO Srini Gopalan told the Financial Times that the Starlink threat has been "exaggerated," arguing satellites are likely to remain complementary to cellular networks and questioning what customer problem a satellite carrier would solve. SpaceX's current direct-to-phone service runs on roughly 5 MHz of spectrum borrowed from partner telecoms, but the FCC has approved two SpaceX deals totaling $19.6 billion for 65 MHz of EchoStar spectrum, including terrestrial rights. Shotwell said that added spectrum, together with a planned tenfold increase in next-generation mobile satellites, could make the upgraded service roughly 100 times more capable than today's offering. SpaceX also plans to build a terrestrial component rather than rely on satellites alone. Shotwell said the company "definitely intend[s] to build out the terrestrial component," while describing a strategy of attaching small cellular base stations to the same mounts used for Starlink broadband dishes and deploying femtocells where demand warrants. Musk said the combination could deliver connectivity "probably better and higher bandwidth" than existing carriers, though analysts remain skeptical. Craig Moffett of MoffettNathanson told Reuters it is "extraordinarily challenging" to imagine a direct-to-consumer Starlink service competing with carrier networks within the next five years. Traders are also watching Starship launch progress, a key piece of infrastructure for the mobile buildout.