SpaceX threatens telecom throne... and tower stocks jump
SpaceX's talks to access 80,000 network sites sparked Wall Street reaction, driving cell tower stocks higher while major telecom stocks fell.
Reports of SpaceX holding talks to access around 80,000 cellular network sites sparked Wall Street's interest, as analysts viewed the move as potentially opening a new frontier for the company in the U.S. telecommunications market. CNBC quoted a note from Goldman Sachs analyst Michael Ng stating that network sites include telecom towers, but could also encompass rooftops, billboards, water towers, distributed antenna systems, and small cells.
Citi analyst Michael Rollins said the most likely scenario involves 80,000 macro sites on shared structures, with a portion potentially representing other forms of coverage such as small cells. Bernstein analyst Laurent Yoon noted that entering into large-scale tower lease agreements reinforces what recent spectrum acquisitions suggested—SpaceX's growing desire to rely on ownership economics rather than partners.
American Tower shares rose 4.08% and Crown Castle jumped 9.06% on Friday, while AT&T fell 7.96% and T-Mobile dropped 7.71%, according to Nasdaq and Stock Analysis data. These moves follow reports of SpaceX agreeing to purchase low-band 800 MHz spectrum from Grain Management, a spectrum that penetrates walls and windows.
Analysts believe SpaceX could build its outdoor network anchored by its Starlink home services, as low-band spectrum could carry most voice call and text messaging traffic, while home usage data is offloaded to home Wi-Fi networks. However, displacing the big three telecom carriers will not be an easy task, and AT&T CEO John Stankey stated that achieving performance levels that customers are accustomed to requires many years and massive investments.
What do these terms mean?
Cellular network site: A coverage point for a mobile network, which could be a tower, rooftop, water tower, or a small mounted device to boost signal strength.
Frequency spectrum: A range of electromagnetic waves used by telecommunications companies to transmit calls and data, with its characteristics determining coverage range and speed.
Small cells: Low-power transmitters and receivers deployed to cover narrow areas or increase network capacity in crowded places.
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