Investing.com -- Telecom stocks in Australia and New Zealand fell on Monday after SpaceX agreed to acquire a nationwide low-band spectrum portfolio in the U.S., fuelling concerns that satellite-based mobile services could increasingly challenge traditional telecommunications operators.
Telstra, Australia's largest telecom company, fell 2.5% to a six-week low, while TPG Telecom dropped 4.9% in its steepest daily decline since early June. New Zealand's Spark fell 1.8%. Smaller Australian providers Superloop and Aussie Broadband lost 2.4% and nearly 2%, respectively.
The declines came despite gains in the broader Australian market, with the S&P/ASX 200 rising 0.76% on Monday.
SpaceX struck a deal last week to acquire a U.S. nationwide portfolio of low-band spectrum, including up to 14 megahertz of paired spectrum in the 800 MHz band.
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The acquisition is intended to strengthen its Starlink Mobile service by combining satellite connectivity with terrestrial infrastructure, subject to final approval from the U.S. Federal Communications Commission. The transaction was reported to be worth about $8 billion, according to The Wall Street Journal.
Low-band spectrum can travel longer distances and penetrate buildings more effectively than higher-frequency signals, potentially helping SpaceX expand mobile coverage beyond areas served reliably by conventional networks. The deal marks a significant step in the company's ambitions to compete more directly with established U.S. wireless carriers.
Investors are increasingly concerned that this competitive threat could extend beyond the U.S. market. He identified Telstra as particularly exposed because of its reliance on network coverage, while noting that the nearer-term risk may be to regional pricing power rather than subscriber numbers.
However, the outlook for established telecom operators is not uniformly negative. Citi maintained its "buy" rating on Telstra, arguing that SpaceX's spectrum purchase also highlights the strategic importance of owning terrestrial spectrum. The bank continued to see upside to Telstra's 2027 financial guidance.
The selloff highlights growing investor concern that satellite-to-mobile technology could reshape competition in telecommunications, potentially putting pressure on incumbent operators' pricing power and the value investors assign to their existing network assets.
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