Shares of AT&T, Verizon and T-Mobile fell in premarket trading on Friday after a report said SpaceX was in talks with cellular infrastructure companies to secure access to at least 80,000 sites across the United States.
AT&T stock fell about 4.6%, Verizon declined around 4%, and T-Mobile dropped approximately 5% before the market opened.
SpaceX stock was up over 2%.
Bloomberg reported that SpaceX aims to secure a minimum of 80,000 cell sites and is negotiating with at least one major cellular infrastructure company, citing people familiar with the discussions.
The agreements could help the Elon Musk-led company establish a fourth nationwide wireless carrier, intensifying competition for the country’s established telecom providers.
One company involved in the discussions is Crown Castle, which, alongside American Tower and Vertical Bridge Holdings, ranks among the largest owners of cellular towers in the US.
Crown Castle shares rose nearly 9% in premarket trading, while American Tower gained more than 6%. Bloomberg said the potential deals could be worth billions of dollars.
Tower companies could benefit from SpaceX expansion
Wireless carriers typically lease space on cellular towers to install equipment that transmits signals across their networks.
Sharing tower infrastructure is generally more cost-effective than building and maintaining individual sites.
SpaceX’s reported push to secure thousands of locations could therefore create a significant business opportunity for tower operators as the company assembles the infrastructure needed to compete in the US wireless market.
Asked during an earnings conference call on Wednesday whether Crown Castle was discussing leases with SpaceX, Amazon.com or other satellite-based telecom providers, Chief Executive Officer Chris Hillabrant said, “You can assume that we’re talking to all parties.”
He declined to discuss specific customers.
Hillabrant also described SpaceX’s recent acquisition of low-band spectrum as a “huge milestone” in its ability to provide broad mobile coverage.
Tower operators’ shares had already climbed after news of SpaceX’s spectrum purchase earlier this month, reflecting investor expectations that the company could require substantial ground infrastructure to deploy its wireless services.
Musk pushes to build a nationwide wireless carrier
Musk has made clear his ambition to turn SpaceX into a standalone wireless carrier, using its Starlink satellite network and newly acquired spectrum to challenge established mobile operators.
SpaceX recently secured Federal Communications Commission approval to launch 15,000 satellites designed to provide mobile connectivity directly to phones.
Combined with its spectrum holdings and terrestrial infrastructure, the satellites could help the company build a more comprehensive wireless service.
“We will be building out our terrestrial networks so there’s broad-based connectivity anywhere that SpaceX and Starlink are allowed to operate,” Musk said during SpaceX’s earnings call this week.
Satellite launches and spectrum acquisition “will pave the way for Starlink Mobile to become a major mobile carrier in the US,” he said.
SpaceX has also said it plans to use home internet equipment to emit mobile signals around customers’ installations.
However, research firm MoffettNathanson LLC has noted that these locations are not necessarily where infrastructure is needed to ensure consistent network coverage.
Securing access to existing cellular tower sites could help address that challenge, although the scale, cost and timing of any agreements remain unclear.
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