SpaceX Seeks 80,000 Cell Sites for Starlink Mobile, and AT&T and T-Mobile Stocks Drop Nearly 6%

SpaceX is lining up at least 80,000 cell sites across the country to turn Starlink Mobile into a fourth nationwide phone carrier, taking on AT&T, Verizon and T-Mobile on their own turf. Bloomberg broke the story Thursday evening, reporting that Elon Musk's company is in talks with Crown Castle, one of the biggest tower owners in the U.S., according to people familiar with the matter.

That is about half of the 158,500 purpose-built cell towers operating in the U.S. at the end of last year, by the Wireless Infrastructure Association's count, Reuters reported. Bloomberg said the deals could be worth billions of dollars.

Wall Street took it seriously. By early Friday afternoon, AT&T and T-Mobile were each down nearly 6% and Verizon was off about 1%, while Crown Castle jumped about 10% and American Tower and SBA Communications climbed too. SpaceX stock rose about 2% (Reuters; Yahoo Finance market data).

What SpaceX is building

Today, Starlink is best known for beaming internet from space to dishes on roofs. Starlink Mobile is its phone service, which connects ordinary phones directly to satellites. It already had more than 22 million monthly users worldwide at the end of September, up 37% in three months, SpaceX said on its earnings call Tuesday (transcript).

The plan now is to add a ground network so the service works everywhere, inside buildings included. "We will be building out our terrestrial networks so there's broad-based connectivity anywhere that SpaceX and Starlink are allowed to operate," Musk said on the call (Bloomberg). SpaceX says its next-generation phone satellites fly through 2027, and it plans to turn on service with its new spectrum in early 2028 (transcript).

Think of a new airline that already owns the sky. What it still needs is gates at the airports. The 80,000 cell sites are the gates.

The spectrum is already lined up

Towers are the last big piece. SpaceX bought its main airwaves, the 2 GHz "S-band" spectrum, from EchoStar for $17 billion last year, The Verge noted. On Oct. 8 it agreed to buy all of Grain Management's nationwide 800 MHz portfolio, up to 14 megahertz of paired low-band spectrum, pending FCC approval (Grain; Via Satellite). The Wall Street Journal put the price at $8 billion, Light Reading reported.

Low-band signals travel farther and get through walls. SpaceX said the new spectrum "will provide a coverage layer that ensures Starlink Mobile's signal penetrates through obstacles, such as walls," and that most phones already support the band (Via Satellite). Musk called it "the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America."

"To the casual observer, this won't seem like much," he added in a reply. "To those who understand the spectrum wars, it's an earthquake" (@elonmusk).

Why the tower owners are smiling

Crown Castle CEO Chris Hillabrant would not name names on his company's earnings call Wednesday, when asked whether it was talking with SpaceX, Amazon or other satellite players. "You can assume that we're talking to all parties," he said. He called SpaceX's low-band purchase a "huge milestone" for broad mobile coverage (Bloomberg).

For Crown Castle, a big new tenant matters. It owns about 40,000 U.S. towers, and AT&T, Verizon and T-Mobile supply 93% of its site rental revenue. American Tower owns about 42,000. The last company that tried to become a fourth national carrier, Dish, walked away from its towers (24/7 Wall St.). SpaceX brings something Dish never had: a rocket company's balance sheet and a satellite network already in orbit.

What it means for your phone bill

The U.S. has had three national carriers for years, and they have had the market to themselves. A fourth, backed by the company that built the world's biggest satellite network, means another choice for customers and more pressure on the big three to compete on price and coverage. That is exactly the threat investors priced in Friday.

It is not cheap. TD Cowen estimates a nationwide ground network would cost more than $80 billion and take years (Reuters). SpaceX has a way to keep the bill down: it plans to mount small radios on Starlink dishes already installed at homes and businesses, alongside towers. "We will basically leverage the real estate from Starlink installs and other towers," Shotwell said (transcript).

Musk has told investors he sees Starlink connectivity growing into a business that brings in "several hundred billion dollars in revenue a year" (Forbes). Analysts are taking the mobile push seriously. "The window in which incumbents can treat Starlink Mobile as a science project is narrowing," Evercore ISI analyst Kutgun Maral wrote after the spectrum deal (Light Reading).

The news spread fast on 𝕏.

What's next

No tower lease has been announced yet, SpaceX has not commented, and American Tower declined to comment (Bloomberg). The FCC still has to approve the Grain spectrum deal, which is expected to close in the first half of 2027 (24/7 Wall St.).

The carriers will have to answer for it soon. Verizon reports earnings Monday, American Tower on Tuesday and T-Mobile on Wednesday, and SpaceX is sure to come up on all three calls (24/7 Wall St.). For the first time in years, the big three have a new competitor to talk about, and it already has the satellites, the spectrum and a line on half the towers in America.