Investing.com -- U.S. and European telecom stocks tumbled Friday after Space Exploration Technologies said it will buy a nationwide U.S. spectrum portfolio, a push to turn Starlink into a full-fledged mobile carrier.
Shares of U.S. telecom giants AT&T and Verizon slid about 6% each, while T-Mobile tumbled around 10% in U.S. trading by 10:37 ET (14:37 GMT). In Europe, Deutsche Telekom slumped 7.2%, Vodafone shed 3.8%, and Orange SA fell 2%. Telefonica slid 4%, and BT Group slipped 1.9%, while Koninklijke lost 1.1%.
SpaceX agreed to buy the portfolio from Grain Management, a digital infrastructure investor, in a deal subject to Federal Communications Commission (FCC) approval. It covers up to 14 megahertz of paired spectrum in the 800 MHz band.
"This prime low-band spectrum addresses one of the key remaining technical gaps that will pave the way for Starlink Mobile to become a major mobile carrier in the U.S.," SpaceX said. CEO Elon Musk called it a "very big deal" in a post on X.
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Unlike satellite spectrum, the licenses are suited to service from cellphone towers. Once the FCC approves, SpaceX said it will pair its growing satellite constellation with "an advanced terrestrial deployment," covering places satellites can't reach, including inside buildings. The FCC earlier this week approved SpaceX's bid to launch up to 15,000 satellites dedicated to mobile service.
Russ Mould, investment director at AJ Bell, told Investing.com that it "should be no surprise to anyone that Mr Musk and SpaceX should be looking for another, related market to disrupt, this time through the acquisition of low-band spectrum to supplement its position in mid-band."
Mould said the combination of low-band and mid-band frequencies would enable SpaceX "to cut out conventional cell towers and challenge both traditional wireless operators and mobile infrastructure owners," with bundled broadband and mobile services representing "a direct challenge to AT&T, Verizon and T-Mobile in the USA, as well as established, incumbent operators in Europe and across the globe."
SpaceX appears intent on competing with the carriers directly. Last week, T-Mobile, AT&T and Verizon formed a joint venture to expand satellite coverage in underserved areas, without Starlink. T-Mobile has also removed mentions of Starlink from its T-Satellite promotions.
SpaceX has offered basic wireless connections in remote areas through a T-Mobile partnership for more than a year and has been upgrading its network with newer satellites that carry more data. Last year it agreed to a roughly $17 billion cash-and-stock deal for satellite spectrum rights from EchoStar, later adding $2.6 billion of EchoStar's ground-based licenses.
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