SpaceX Seeks 80,000 Cell Sites to Build a Fourth US Mobile Carrier, and Telecom Stocks Slide

SpaceX is in talks to secure at least 80,000 cell sites across the United States as it works to build a fourth nationwide mobile carrier, Bloomberg reported, citing people familiar with the matter. The sites would give Elon Musk's company the ground network it needs to pair with its Starlink satellites, which are built to connect directly to ordinary phones.

Crown Castle, one of the largest owners of cell towers in the country, is among the companies in talks with SpaceX, Bloomberg said. American Tower and Vertical Bridge are the other big owners of cellular towers in the United States. SpaceX did not immediately respond to a request for comment, Bloomberg reported.

Investors move fast

The report hit the three established carriers hard for a second day. In Friday trading, shares of AT&T, Verizon and T-Mobile fell between 2.5 percent and 4 percent, after drops of close to 4 percent and more before the open. The tower owners moved the other way. Crown Castle jumped 12 percent and American Tower rose about 8 percent in Friday trading, and SpaceX shares rose about 1 percent after a 9 percent fall on Thursday.

Telecom shares had already fallen earlier this week after SpaceX restated its plans to expand into the wireless market in its quarterly earnings. The three national carriers have dominated US mobile service since T-Mobile bought Sprint in 2020, and a fourth network backed by the world's largest satellite fleet is the first serious challenge to that position in years.

What the tower companies say

Asked on Crown Castle's earnings call on Wednesday about talks with SpaceX and other satellite based providers, chief executive Christian Hillabrant said, "you can assume that we're talking to all parties." He declined to discuss specific customer details, Bloomberg reported.

Analysts at Citi, in a note led by Michael Rollins on Thursday, called the SpaceX push into mobile a net positive for the tower stocks and a net negative for the carriers. They said the lease agreements SpaceX would sign could be worth billions of dollars. They also set out the time this would take: three to five years to build the coverage, and perhaps a decade to approach a 20 percent share of the market.

The pieces already in place

The 80,000 sites SpaceX is seeking equal half of the 158,500 purpose built cell towers in operation in the United States last year, according to figures from the Wireless Infrastructure Association cited in coverage of the Bloomberg report. Ground sites matter because satellite signals are weak inside buildings, under bridges and in other covered places, and a carrier that wants to serve phones everywhere needs both layers.

SpaceX has spent this month assembling the other pieces. On October 8 it announced a deal to acquire a nationwide low band spectrum portfolio, the airwaves that carry phone signals over long distances and into buildings, and Musk called that purchase the last critical piece of the spectrum puzzle on X. The company has also received approval from the Federal Communications Commission to launch 15,000 satellites designed to connect directly to mobile phones.

No agreement with any tower company has been announced, and the talks could still produce a smaller deal or none at all. What is already clear is how Wall Street is pricing the threat: money moved out of the three carriers and into the companies that own the towers a new carrier would have to rent.