SpaceX Acquires Nationwide Spectrum Rights to Expand Starlink Mobile in US

SpaceX, the space company led by Elon Musk, has announced an agreement to acquire nationwide spectrum rights as part of its push to expand the Starlink service in the US telecommunications market. Shares of Verizon, AT&T, and T-Mobile dropped in pre-market trading, while SpaceX climbed. The deal involves a collection of radio spectrum usage rights covering large parts of the US rather than a single state.

Under the agreement, SpaceX purchased the rights to use 800 MHz band spectrum for cellular communication services from Grain Management, a firm specializing in digital infrastructure. The transaction is subject to approval by the Federal Communications Commission (FCC). SpaceX stated in a release that the acquisition covers a portfolio of up to 14 MHz of paired 800 MHz spectrum.

"This premier low-band spectrum addresses one of the key remaining technological gaps and paves the way for Starlink Mobile to become a major mobile operator in the US," SpaceX noted. In a post on X, SpaceX CEO Musk called the agreement a "very big deal."

Last week, Verizon, AT&T, and T-Mobile formed a joint venture focused on expanding coverage in underserved areas using satellites and direct-to-device (D2D) connectivity services. Starlink was notably absent from the venture, and T-Mobile previously removed mentions of Starlink from its T-Satellite service promotions. SpaceX appears determined to compete directly with major US telecom giants and offer services independently.

"This adds fuel to the fire in the battle between SpaceX and mobile operators," said Tim Farrar, an industry expert at TMF Associates. "However, it is still a very limited amount of spectrum, and to achieve reliable indoor penetration in urban areas, SpaceX will need to deploy terrestrial antennas."

The announcement comes a day after the FCC said it would vote on a proposal to auction 25 MHz of "mobile spectrum" to support satellite-to-smartphone D2D services. The commission also stated it would vote on October 29 to initiate a public comment process regarding a proposal to make an additional 482 MHz of spectrum available for supplemental space-based coverage and update FCC rules for D2D services in licensed spectrum. Both proposals could benefit SpaceX as well as Amazon, which is also developing a satellite network service.

SpaceX, which went public in June in a record-breaking IPO and is currently valued at over $2 trillion, has relied on Starlink as its cash cow and its only profitable business segment to date. The service is available in 205 countries and boasts 12 million subscribers as of June 30, according to the company's second-quarter report. The connectivity business generated an operating profit of $1.66 billion on revenue of $4.29 billion during that period.

Starlink is the world's largest satellite communication network, with over 11,000 satellites in orbit. Deutsche Bank analysts, who maintain a buy rating on SpaceX stock, estimated in a report this week that Starlink's global subscriber base reached 13.5 million by the end of September, including 4.1 million in the US. In its rocket business, SpaceX has reduced its planned launch rate for next year as the company focuses on making its massive Starship rockets reliable and fully reusable, aiming to gradually phase out the smaller Falcon rockets.