SpaceX Seeks Access to 80,000 Cell Sites, Knocking AT&T and T-Mobile Shares

SpaceX is in talks to secure access to at least 80,000 cell sites across the United States as it builds toward a fourth nationwide wireless carrier, Bloomberg News reported late Thursday.

The discussions involve at least one major cellular infrastructure company, including Crown Castle, according to people familiar with the matter who asked not to be named because the talks are private.

The value of the deals could reach into the billions of dollars. No agreement has been announced, and the number of sites, rents and other terms have not been disclosed.

American Tower declined to comment. SpaceX and tower owner Vertical Bridge did not immediately respond to requests for comment.

Investors moved quickly. AT&T fell 5.6% to a more than three-month low in midday trading Friday, T-Mobile shed 5% and Verizon lost 1.6%, Reuters reported. Germany’s Deutsche Telekom, which owns more than half of T-Mobile, slipped 3.2%.

Tower owners rallied on the prospect of a large new tenant. Crown Castle surged 11.6%, American Tower gained 4.9% and SBA Communications added 4.6%. SpaceX shares rose 1.7%.

“The competitive impact may still be years away, but anticipation alone, reinforced by each successive spectrum and infrastructure move, is likely to remain an overhang on sector sentiment,” Bernstein analysts wrote in a note.

Spectrum First, Now Towers

The tower talks follow SpaceX’s early-October agreement to buy a nationwide portfolio of low-band airwaves from Grain Management for about $8 billion, a deal that is subject to Federal Communications Commission approval.

That announcement triggered a steep selloff. Verizon closed down 8.75% on Oct. 9, its worst day since July 2002, while T-Mobile dropped 13.27% and AT&T fell 9.81%.

“We will be building out our terrestrial networks so there’s broad-based connectivity anywhere that SpaceX and Starlink are allowed to operate,” Elon Musk said on SpaceX’s earnings call this week, according to Bloomberg.

Low-band spectrum carries signals over long distances and into buildings, but airwaves alone are not enough. A carrier also needs antennas on the ground, typically leased on towers shared with other providers.

Bernstein analyst Laurent Yoon called the tower push the more important step. “Committing ~$30 billion into spectrum is serious enough. Committing to 80K macro sites could be a point of no return,” he wrote, as quoted by Yahoo Finance.

Crown Castle CEO Chris Hillabrant declined on a Wednesday earnings call to discuss specific customers. Asked whether the company was talking leases with SpaceX, Amazon or other satellite providers, he said, “You can assume that we’re talking to all parties.”

The scale of a build-out would be steep. Goldman Sachs analysts estimate a cellular tenant pays roughly $50,000 a year per tower, which would put 80,000 sites at about $4 billion in annual rent, Yahoo Finance reported.

That figure excludes equipment, backhaul and operating costs. The country has roughly 175,000 traditional cell towers, according to SNL Kagan data cited in the same report.

Incumbents say a real challenge is years off. “It’s not something that gets done overnight,” AT&T CEO John Stankey told analysts Wednesday. “It takes a lot of years and a huge level of investment.”

AT&T, Verizon and T-Mobile, through the wireless trade group CTIA, are also lobbying the FCC to preserve spectrum rules that protect licensed ground-based networks, opposing changes that would make it easier for satellite companies to offer cell service.

Content created by Conservative Daily News and some content syndicated through CDN is available for re-publication without charge under the Creative Commons license. Visit our syndication page for details and requirements.