T, TMUS, VZ Stocks Plunge After-Hours As SpaceX Buys 800 MHz Spectrum For Starlink Mobile

• The company called the licenses a fix for one of the remaining technical gaps in Starlink Mobile.
• Elon Musk called the purchase “the last critical piece of the spectrum puzzle” and “a very big deal.”
• SpaceX said that once it receives final Federal Communications Commission approval, Starlink Mobile will run a flexible network that pairs its satellite-to-mobile constellation with a terrestrial buildout.

Telecom shares fell after hours on Thursday after SpaceX (SPCX) said it had agreed to buy a nationwide low-band spectrum portfolio, a step the company said would let Starlink Mobile compete as a major U.S. mobile carrier.

AT&T (T), T-Mobile US (TMUS), and Verizon (VZ) sank about 7% in post-market trading. Comcast (CMCSA) slipped about 2%.

SPCX shares rose 3% after hours, while its closest rival in satellite-to-phone service, AST SpaceMobile (ASTS), slipped 3%.

SpaceX Buys Low-Band Licenses Meant To Reach Phones Indoors

In an update posted Thursday, SpaceX said it had agreed to acquire up to 14 megahertz of paired spectrum in the 800 MHz band. The company called the licenses a fix for one of the remaining technical gaps in Starlink Mobile. Elon Musk called the purchase “the last critical piece of the spectrum puzzle” needed for complete phone coverage in America, and “a very big deal.”

Starlink Mobile’s existing global 2 GHz mid-band spectrum is meant to carry high-bandwidth capacity in the United States. The new low-band holdings are intended as a coverage layer, with a signal that can pass through walls and reach devices inside buildings. SpaceX said most existing phones already support the band, which it described as underused.

The company did not disclose a price or name the seller in the update. Reuters identified the portfolio as private-equity firm Grain Management’s nationwide 800 MHz holdings and said the deal is for 100% of that portfolio, with terms not disclosed. Grain acquired the airwaves from T-Mobile earlier this year.

A Satellite-And-Ground Network Still Needs FCC Sign-Off

SpaceX said that once it receives final Federal Communications Commission (FCC) approval, Starlink Mobile will run a flexible network that pairs its satellite-to-mobile constellation with a terrestrial buildout. The aim, it said, is continuous service indoors, outdoors, and in cellular dead zones.

With the low-band licenses and its Gen2 constellation, SpaceX said Starlink Mobile would be the first operator to deploy both satellite and terrestrial spectrum as one network. Starlink already provides broadband from space to millions of customers in the United States and abroad, the company said.

A Second Milestone The Same Week For SPCX

The spectrum agreement was one of two milestones SpaceX listed for the week. The FCC also approved Starlink Mobile’s Gen2 constellation application, authorizing 15,000 satellites. SpaceX said the V2 satellites will deliver more than 100 times the bandwidth of the current generation and bring high-speed service to unmodified devices.

How DID SPCX, T, VZ And TMUS Retail Traders React?

On Stocktwits, retail sentiment around SPCX, T, VZ, ASTS and TMUS was bullish at the time of writing.

A Stocktwits user dismissed the telecom selloff, calling it “delusional” to believe SpaceX owns the cell phone market.

Another dismissed the selloff, saying that SpaceX is still a long way from mobile service, similar to how far Tesla was with vehicle autonomy in 2017.

VZ stock has gained 14% year-to-date, while T shares stayed flat. ASTS and TMUS dropped  22% and 16%, respectively, in the meantime. 

Read More: SBUX-CMG Takeover Rumors: One Analyst Firm Sees Real-Estate Fit, Others See Distraction

For updates and corrections, email newsroom[at]stocktwits[dot]com