Space Exploration Technologies Corp. (NASDAQ: SPCX) has agreed to purchase a nationwide portfolio of up to 14 megahertz of paired 800 MHz licenses from investment firm Grain Management. According to a report from The Wall Street Journal, the deal is valued at approximately $8 billion in cash.
The acquisition is intended to complement SpaceX's existing higher-frequency 2 GHz licenses. The company stated that the new 800 MHz spectrum will help Starlink Mobile extend coverage to phones inside buildings. Elon Musk described the purchase as the final piece SpaceX needed to finalize its service.
Following the announcement, the stock market opened with declines for the three major U.S. wireless carriers. AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), and T-Mobile US Inc. (NASDAQ: TMUS) were all in the red on Friday morning. Together, the three companies shed about $39 billion in market value, which is nearly five times the amount SpaceX paid for the spectrum.
AT&T was on track for its largest one-day decline since April 20, 2023, while Verizon was on track for its largest decline since July 17, 2023.
The Federal Communications Commission ruled this week that SpaceX does not need leasing agreements with ground-based carriers to offer its service. Analysts are watching for potential impacts on the market structure. Wells Fargo analyst Steven Cahall estimated SpaceX could initially target roughly 2% of the U.S. population and noted that a three-player market gaining a smaller fourth player is a net negative. Conversely, tower owners rallied, with Crown Castle Inc. (NYSE: CCI) gaining over 8% and American Tower Corp. (NYSE: AMT) rising nearly 7%.
