SpaceX Is Looking to Acquire a Virtual Mobile Carrier — The Washington Post

Elon Musk, CEO of the space company SpaceX, has been in talks with the telecommunications company EchoStar about acquiring its mobile carrier Boost Mobile or gaining access to its network, The Washington Post reported, citing sources. Musk hopes to turn SpaceX into the fourth-largest cell phone carrier in the U.S., and acquiring Boost Mobile could be the quickest route to entering that market, MarketWatch reports.

SpaceX has identified a potential acquisition target to enter the U.S. mobile communications market. That target could be the struggling budget mobile carrier Boost Mobile, owned by the telecommunications company EchoStar, according to The Washington Post. According to the publication, SpaceX CEO Elon Musk approached all three of the largest U.S. mobile carriers—AT&T, Verizon, and T-Mobile—with a request for access to their networks but was turned down.

SpaceX’s satellite network does not yet have sufficient coverage in the low-frequency bands or the other ground infrastructure needed to provide full-fledged mobile communication services. Therefore, Musk is striving to expand SpaceX’s capabilities as quickly as possible by gradually acquiring the necessary assets. For example, last month SpaceX agreed to purchase a nationwide spectrum package from Grain Management, which is necessary for the development of Starlink Mobile. The company plans to acquire spectrum from at least three companies, including EchoStar, according to MarketWatch.

Competitive pressure from SpaceX is forcing the three largest national carriers to end their partnerships with Musk. However, the acquisition of Boost Mobile could allow him to circumvent this obstacle. According to The Washington Post, Boost Mobile leases network capacity from AT&T and T-Mobile.

SpaceX shares rose as much as 5.4% during trading on November 2, reaching a high of $142.05.

“The main focus of the [WP] article seems to have shifted somewhat” compared to previous reports on SpaceX’s negotiations with cell tower owners, noted BNP Paribas analyst Sam McHugh in a MarketWatch report. Although the company may be pursuing both options simultaneously, the Washington Post article “seems to indicate that an MVNO remains its preferred option,” the analyst wrote in a note cited by MarketWatch. An MVNO (Mobile Virtual Network Operator) is a virtual mobile network operator that uses another operator’s unused network capacity but provides services to subscribers under its own brand.

"If SpaceX does go ahead with the acquisition of Boost Mobile and builds its own network, AT&T will stand to lose the most, since Boost, as a virtual network operator, accounts for about 1% of its mobile service revenue, according to our estimates," McHugh wrote.

Acquiring a telecommunications company is no easy task, but such a deal would allow Starlink Mobile to enter the market several years earlier, according to Citi analyst Michael Rollins. Against the backdrop of SpaceX’s expansion into the mobile communications sector, he named EchoStar and several publicly traded companies that own cell towers as potential acquisition targets, according to MarketWatch. However, AT&T may try to terminate the existing agreement, the analyst added.

This article was AI-translated and verified by a human editor