SpaceX's Starlink Mobile push wipes $50B off AT&T, Verizon, T-Mobile

SpaceX said late Thursday that it intends to become a major mobile carrier in the United States, laying out a plan to pair its satellite-to-mobile constellation with a terrestrial network that would connect devices nationwide once it secures final approval from the Federal Communications Commission. The company also announced that the FCC had cleared the launch of 15,000 additional satellites under Starlink Mobile, a SpaceX subsidiary.

The disclosure hit wireless stocks hard. AT&T and Verizon each dropped 10% Friday morning, while T-Mobile US fell 14%, collectively shedding more than $50 billion in market value before midday. Charter and Comcast, which sells wireless service under its own brand using Verizon's network, also declined through the day.

The established carriers pushed back on the idea that Starlink poses an immediate threat. Verizon said in a statement to NBC News that buying spectrum alone does not deliver the network or infrastructure needed for nationwide coverage, adding that spectrum without a network to run it is essentially unused airwaves. T-Mobile technology president John Saw wrote on LinkedIn that he respects SpaceX's space achievements but that standing up a network would require years of engineering, noting a nationwide wireless system cannot be acquired in a single transaction. AT&T did not respond to a request for comment.

Wall Street analysts shared that skepticism. JPMorgan Chase analysts wrote that without a deal with an existing carrier, SpaceX would probably need to build a terrestrial network of macro towers to match traditional wireless service, and said they see limited near-term risk to incumbents given the time, infrastructure and capital required. UBS analysts noted that the radio waves SpaceX purchased would likely struggle to reach inside some buildings, requiring ground-based infrastructure to supplement satellites.

The announcement is the latest expansion of Musk's tech holdings, which already include Tesla, X and xAI. Within SpaceX, Starlink sells high-speed internet to consumers and businesses while Starshield serves governments, and Starlink is the only profitable part of the business, according to its latest earnings report, with more than 12 million paying subscribers.

Musk wrote on X that acquiring spectrum was the last critical piece needed for SpaceX to offer complete phone coverage in America, and FCC Chairman Brendan Carr told CNBC on Friday that the development would be good news for American consumers. SpaceX's relationships with the carriers are complicated: T-Mobile announced a partnership with SpaceX in 2022 but has recently removed the company's name from parts of its website, and a recent joint venture among the three major carriers to expand satellite coverage made no mention of SpaceX or Starlink.