Charter Communications shares CHTR surged over 24% in premarket trading on Monday after a Bloomberg report said the cable and broadband giant was in discussions with SpaceX over a potential partnership to offer consumer mobile services.
According to the report, executives from SpaceX and Charter have held high-level talks about working together on a mobile phone offering.
While the discussions remain private and no agreement has been finalized, investors welcomed the possibility of Charter becoming a key partner in SpaceX’s expanding consumer connectivity ambitions.
Partnership could accelerate SpaceX’s mobile plans
People familiar with the discussions told Bloomberg that Charter, the largest home internet provider in the United States, could route some of SpaceX’s mobile traffic through its ground-based internet infrastructure, similar to how it currently supports its Spectrum Mobile service.
Such an arrangement would advance SpaceX’s plans to become a broader direct-to-consumer mobile provider rather than relying solely on partnerships with established wireless carriers.
The discussions gained added significance after the Financial Times reported on Friday that SpaceX intends to offer mobile services directly to consumers.
To achieve that goal, the company will require significant mobile spectrum holdings alongside extensive terrestrial infrastructure to complement its satellite network.
SpaceX has already been strengthening its wireless assets.
The company recently acquired mobile spectrum in the Federal Communications Commission’s AWS-3 auction after purchasing additional spectrum rights from EchoStar last year.
“Starlink Mobile will far exceed Starlink broadband in the home,” SpaceX President Gwynne Shotwell recently told CNBC.
“Not everybody is going to need broadband, a Starlink broadband, in their homes. There’s lots of other options as well. But I think the numbers of users of Starlink Mobile will far exceed our Starlink broadband.”
Currently, SpaceX offers Starlink Mobile as a $10-per-month add-on through T-Mobile, allowing users to send text messages and make internet-based calls in remote areas beyond conventional cellular coverage.
Charter could gain from shifting competitive landscape
For Charter, a partnership with SpaceX could mark a strategic shift at a time when investors have become increasingly concerned about Starlink’s growing competitive threat.
Despite expanding its wireless business through Spectrum Mobile and agreeing last year to merge with Cox Communications, Charter’s shares have fallen about 36% so far this year as Wall Street reassessed the risks posed by satellite broadband.
Through Spectrum Mobile, Charter currently provides wireless services using infrastructure agreements with T-Mobile and Verizon while routing a substantial portion of customer traffic over its own Wi-Fi network.
The addition of Cox is expected to expand Charter’s subscriber base by more than 20%, strengthening its position in broadband and mobile services.
Starlink no longer viewed as a niche rival
Investor sentiment toward Starlink has shifted sharply over the past year.
For years, the satellite internet business was largely viewed as serving rural areas lacking access to cable or fibre broadband.
However, its rapid subscriber growth and expansion into commercial aviation have prompted analysts to reassess its long-term competitive impact.
Starlink has doubled its subscriber base annually in recent years while securing major broadband contracts with airlines including American Airlines and United Airlines.
Wolfe Research analyst Peter Supino recently warned that Starlink could become “a comet bearing down on broadband incumbents.”
Wall Street is increasingly concerned that SpaceX could begin taking broadband market share from cable operators including Charter and Comcast, as well as fibre providers such as AT&T and Verizon.
Among those companies, cable operators are widely regarded as the most exposed because broadband services generate the majority of their profits and rely on ageing network infrastructure.
Against that backdrop, any partnership between Charter and SpaceX could potentially transform a growing competitive threat into a strategic opportunity for both companies.
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