Space Exploration Technologies Corp. (NASDAQ: SPCX) CEO Elon Musk stated on Thursday that the company's acquisition of 800 MHz spectrum is a major milestone for providing satellite-based cellular connectivity in the United States. Musk described the deal as a critical component of the company's strategy to offer complete phone coverage across America.
The company has agreed to acquire a nationwide portfolio containing up to 14 MHz of paired spectrum in the 800 MHz band from Grain Management. SpaceX stated that this low-band spectrum will complement its existing 2 GHz spectrum and assist Starlink Mobile in providing connectivity to devices located inside buildings. The 800 MHz band is characterized by its ability to allow signals to travel long distances and penetrate buildings and obstacles more effectively than higher-frequency spectrum.
The Federal Communications Commission (FCC) approved the deployment of 15,000 Starlink Mobile units to provide Mobile Satellite Services (MSS) on Tuesday. The approval stipulates that SpaceX will not need to enter leasing agreements with ground-based carriers for the service. The company plans to utilize femtocells, which are cellular base stations designed to improve connectivity indoors.
Following the announcement, shares of major telecom companies fell during overnight trading. AT&T shares dropped 6.59% to $23.23, Verizon Communications Inc. (NYSE: VZ) shares fell 5.70% to $43.71, and T-Mobile US Inc. (NASDAQ: TMUS) shares declined 6.10% to $160.86.
SpaceX shares were up 3.11% to $165.57 during overnight trading. Investor Gene Munster suggested that a vertically integrated handset on a Starlink mobile network could deliver features that carriers cannot match and offer cheaper service. Munster noted that even if Musk denies the existence of a smartphone, a SpaceX device could pose challenges for Apple Inc. (NASDAQ: AAPL) and Samsung Electronics Co., Ltd.
