SpaceX wants 80,000 US cell sites for Starlink Mobile, and carrier stocks are sliding
SpaceX is in talks with tower owners including Crown Castle for at least 80,000 US cell sites, a step toward a fourth nationwide carrier.
The skim
- SpaceX wants space on at least 80,000 US cell sites and is in talks with tower owners including Crown Castle, Bloomberg reported Thursday, citing people familiar with the matter.
- The sites would give Starlink Mobile a ground network to go with its satellites and newly bought low-band spectrum. That's the kit a fourth nationwide carrier needs.
- AT&T, Verizon and T-Mobile shares fell more than 4% before the bell Friday, while Crown Castle and American Tower jumped, according to Reuters.
What happened
SpaceX aims to secure a minimum of 80,000 cell sites across the US, Bloomberg reports, and it's negotiating with at least one major tower company. One of them is Crown Castle, which along with American Tower and Vertical Bridge owns many of the country's towers. Bloomberg says the deals could be worth billions.
Asked on Wednesday's earnings call whether Crown Castle was discussing leases with SpaceX, Amazon or other satellite companies, CEO Chris Hillabrant said: "You can assume that we're talking to all parties." He declined to discuss specific customers. American Tower declined to comment to Bloomberg, and SpaceX and Vertical Bridge didn't respond.
Why towers, and why now
Satellites alone can't match a carrier's coverage inside buildings and dense cities. Earlier this month SpaceX agreed to buy 800 MHz low-band spectrum from Grain Management, the kind of airwaves that travel far and get through walls, and it has FCC approval for 15,000 satellites built to serve phones directly. On its Q3 earnings call this week, SpaceX said those pieces "pave the way for Starlink Mobile to become a major mobile carrier in the US," and it's targeting early 2028 to switch on service using its new spectrum.
"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 the call, according to Bloomberg.
For scale, Crown Castle has about 40,000 tower sites. When DISH built its 5G network, it installed equipment on more than 12,000 of them, Hillabrant said on the call. SpaceX's target is far bigger than that, which is why the whole tower industry is in play.
Why it matters
A well-funded fourth carrier is the scenario AT&T, Verizon and T-Mobile have spent years telling investors not to worry about. Markets took it seriously Friday. All three fell more than 4% in premarket trading, while Crown Castle rose 8.6% and American Tower 6.1%, Reuters reported.
The incumbents have a real head start. AT&T CEO John Stankey said this week that matching their networks "takes a lot of years and a huge level of investment," Mobile World Live reports. SpaceX has also floated using its Starlink home dishes to broadcast mobile signal nearby. But research firm MoffettNathanson points out that those dishes sit where subscribers live, not necessarily where a network needs coverage. Leasing towers solves that problem.
For phone owners, the payoff is still years away, but the direction is clear: more competition on price and coverage, and phones that switch between towers and satellites without you noticing.
What's next
Watch for signed lease deals with Crown Castle, American Tower or Vertical Bridge, and for how quickly SpaceX can get radios onto towers before its 2028 target. None of the deals has been announced yet.
Sources: Bloomberg, Reuters, Mobile World Live, and SpaceX's and Crown Castle's Q3 earnings calls.
