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AT&T shares came under pressure in extended trading Thursday after SpaceX announced an agreement to acquire a nationwide wireless spectrum portfolio, intensifying competition between Starlink and America’s major mobile carriers.
The agreement involves spectrum owned by Grain Management, a firm focused on digital infrastructure. The transaction still requires approval from the Federal Communications Commission, but investors reacted quickly. Shares of AT&T, Verizon and T-Mobile all declined after the announcement, while SpaceX shares gained about 2.5% in extended trading after falling during the regular session.
AT&T Faces a Powerful New Starlink Challenge
SpaceX said the portfolio includes up to 14 megahertz of paired spectrum in the 800 MHz band. The company described the low-band spectrum as an important step toward closing a technical gap in its plans to turn Starlink Mobile into a major U.S. wireless carrier.
Low-band spectrum is valuable because it can travel longer distances and penetrate buildings more effectively than higher-frequency signals. For SpaceX, the purchase could help combine satellite connectivity with ground-based wireless coverage as the company expands beyond traditional broadband services.
Elon Musk, SpaceX’s chief executive, called the agreement a “very big deal” in a post on X. His comments underscored the company’s increasingly direct challenge to established telecommunications providers.
Why the Spectrum Purchase Matters
The deal arrives at a sensitive moment for the U.S. wireless industry. T-Mobile, AT&T and Verizon recently formed a joint venture focused on expanding coverage in underserved communities through satellite and direct-to-device services. Starlink was notably absent from that initiative.
T-Mobile has also previously removed references to Starlink from some T-Satellite promotional material. SpaceX’s latest move suggests it may prefer to build and operate more of its own network rather than rely on partnerships with major wireless companies.
- SpaceX is seeking up to 14 megahertz of paired 800 MHz spectrum.
- The transaction requires Federal Communications Commission approval.
- AT&T, Verizon and T-Mobile shares fell in extended trading.
- Starlink is available in 205 countries and territories.
- SpaceX reported 12 million Starlink subscribers as of June 30.
Experts Warn of Limits for SpaceX’s Mobile Ambitions
Despite the excitement surrounding the agreement, analysts cautioned that the spectrum purchase alone will not immediately transform Starlink into a nationwide replacement for traditional mobile networks.
Tim Farrar of TMF Associates said the acquisition adds fuel to the growing battle between SpaceX and mobile operators. However, he described the amount of spectrum as limited and noted that reliable service inside urban buildings would likely require SpaceX to deploy towers on the ground.
That infrastructure challenge could be significant. Satellite signals can provide coverage in remote locations, but dense cities require capacity, low latency and strong indoor performance. Building a complementary terrestrial network would require substantial investment, regulatory approvals and coordination with local authorities.
For AT&T and its competitors, the development creates another source of competitive pressure. The established carriers already face rising costs to expand 5G networks while defending their customer bases against new satellite-to-phone services.
FCC Decisions Could Reshape Satellite Connectivity
The announcement came one day after the FCC said it would vote on a proposal to auction 25 megahertz of prime spectrum for direct-to-device satellite services. The agency also plans to consider public comments on making an additional 482 megahertz available for supplemental coverage from space.
Those proposals could benefit SpaceX and Amazon, which is also developing satellite network services. Regulatory changes may create new opportunities for smartphones to connect directly with satellites, particularly in regions where terrestrial infrastructure is limited.
SpaceX went public in June through a record initial public offering and is now valued at more than $2 trillion, according to the report. Starlink remains the company’s primary profitable business segment. In the second quarter, the connectivity operation generated $4.29 billion in revenue and $1.66 billion in operating income.
Deutsche Bank analysts estimated that Starlink had reached 13.5 million subscribers globally by the end of September, including 4.1 million customers in the United States. The company operates more than 11,000 satellites, making Starlink the world’s largest satellite communications network.
What Comes Next for AT&T and SpaceX?
The immediate next step is regulatory review. SpaceX has not provided a firm timeline for when services using the newly acquired spectrum could launch if the deal is approved.
For AT&T investors, the announcement highlights the changing competitive landscape in wireless communications. Satellite operators are moving closer to the mobile market, while traditional carriers are responding through partnerships, network upgrades and direct-to-device initiatives.
The long-term impact will depend on how quickly SpaceX can secure approval, build ground infrastructure and integrate satellite coverage with terrestrial networks. Until then, AT&T remains a major wireless provider, but the pressure from Starlink is becoming harder for the industry to ignore.
Frequently Asked Questions
Why did AT&T shares fall?
AT&T shares fell in extended trading after SpaceX announced plans to acquire a nationwide spectrum portfolio, raising concerns about stronger competition from Starlink in the U.S. wireless market.
What spectrum is SpaceX acquiring?
SpaceX said the portfolio includes up to 14 megahertz of paired spectrum in the 800 MHz band. The spectrum is being acquired from Grain Management.
Does the deal require government approval?
Yes. The transaction requires approval from the Federal Communications Commission before it can be completed.
Can Starlink replace AT&T’s wireless network?
Not immediately. Experts said SpaceX may need to build ground-based towers to improve indoor and urban coverage, meaning satellite service would likely complement rather than instantly replace traditional networks.
