SpaceX Buys 800 MHz Spectrum to Turn Starlink Into a US Mobile Carrier

SpaceX Moves to Acquire 800 MHz Spectrum

SpaceX announced on Thursday an agreement to purchase a nationwide spectrum portfolio from Grain Management, as the company seeks to expand its Starlink service further into the U.S. telecommunications market, according to CNBC. The deal involves up to 14 megahertz of paired spectrum in the 800 MHz band and is subject to approval by the Federal Communications Commission. SpaceX CEO Elon Musk described the agreement as a 'very big deal' in a post on X.

SpaceX said in a statement that the acquisition of this 'license portfolio of up to 14 megahertz of paired spectrum in the 800 MHz band' addresses a key technical gap and will help pave the way for Starlink Mobile to become a major mobile carrier in the United States, CNBC reported.

Market Reaction: Telecom Shares Slide

Shares of AT&T, Verizon and T-Mobile all tumbled in extended trading following the announcement, according to CNBC. SpaceX shares climbed about 2.5% in extended trading after dropping 4% during regular market hours.

The announcement comes amid heightened competition in the U.S. telecommunications sector. Last week, T-Mobile, AT&T and Verizon formed a joint venture focused on expanding coverage in underserved areas via satellite and direct-to-device services, with Starlink notably absent from the partnership.

Regulatory and Competitive Landscape

The deal remains subject to FCC approval. On Wednesday, the FCC said it would vote on a proposal to auction 25 megahertz of 'prime spectrum' to support direct-to-device services from satellites to smartphones, according to CNBC. The FCC also plans to vote on October 29 on taking public comment regarding a proposal to make an additional 482 MHz of spectrum available for supplemental coverage from space and to modernize rules for direct-to-device services in licensed spectrum.

Industry experts note that while the spectrum acquisition is significant, its scale is limited. Tim Farrar of TMF Associates told CNBC that to achieve reliable building penetration in urban areas, SpaceX would need to deploy ground-based towers in addition to leveraging its satellite network.

Why It Matters: A New Phase in US Mobile Competition

SpaceX’s move to acquire 800 MHz spectrum signals its intent to directly compete with established U.S. mobile carriers, potentially reshaping the competitive landscape. The prospect of Starlink Mobile combining satellite and terrestrial coverage could offer consumers new alternatives, particularly in underserved areas, and has already unsettled incumbent telecom stocks, according to CNBC.

Starlink’s Growth and SpaceX’s Broader Ambitions

Starlink is currently the largest global satellite communications network, with over 11,000 satellites in orbit and service available in 205 countries, according to SpaceX’s second-quarter report cited by CNBC. The company reported 12 million subscribers as of June 30, with Deutsche Bank analysts estimating 13.5 million global subscribers at the end of September, including 4.1 million in the U.S.

Starlink generated $1.66 billion in operating income on $4.29 billion in revenue in the second quarter, making it SpaceX’s only profitable business segment to date, CNBC reported. As SpaceX continues to invest in its rocket, cloud computing, and artificial intelligence businesses, the Starlink service remains central to its financial performance.