SpaceX wants to become a major telecommunications provider in the U.S. Which stocks should you keep an eye on?

SpaceX is in talks to gain access to tens of thousands of cell towers in the U.S., Bloomberg reported. The potential deal is seen as an attempt by the space company to pose a serious challenge to the country’s largest telecom operators—AT&T, Verizon, and T-Mobile. Which stocks should investors keep an eye on?

SpaceX intends to secure access to at least 80,000 sites for deploying cellular equipment across the United States, according to sources cited by Bloomberg. To achieve this goal, they said, Elon Musk’s company is in talks with at least one major telecommunications infrastructure operator.

Musk makes no secret of his intention to build an independent mobile carrier from the ground up, threatening the dominance of the market’s top three players. SpaceX recently acquired low-frequency radio spectrum, which will allow the company to integrate the capabilities of the Starlink satellite system with other elements of its telecommunications infrastructure. Following the release of its quarterly earnings report this week, SpaceX stated that satellite launches, combined with the acquisition of radio spectrum, “will pave the way for Starlink Mobile to become a major mobile carrier.”

SpaceX shares rose 1.5% during morning trading in New York. The acquisition of radio spectrum was a significant step in itself, but committing to 80,000 towers “could be a point of no return,” says Bernstein analyst Laurent Yoon. According to him, the stated scale indicates the company’s serious intentions to build a nationwide terrestrial wireless network. However, it remains to be seen whether SpaceX will ultimately lease even a similar number of towers.

SpaceX’s entry into the mobile communications market could open up new opportunities for cell tower operators, including American Tower and Crown Castle, as Morgan Stanley analysts noted earlier. Shares of American Tower and Crown Castle jumped 7% and 9%, respectively. According to Bloomberg sources, Crown Castle is among the companies in talks with SpaceX. The value of potential deals could reach billions of dollars, the agency reports.

Shares of AT&T, Verizon, and T-Mobile fell by 4% or more. Morningstar warns that the entry of a company with significant financial resources and political influence into the market could undermine the dominance of the “Big Three” U.S. carriers. The telecom giants’ stocks are reacting sharply to any reports of a potential competitor: they had already fallen this week after SpaceX confirmed its plans to enter the mobile communications market when it released its quarterly earnings report.

For now, the long-term prospects for Starlink Mobile raise questions, given the size and profitability of the wireless market, notes Yoon of Bernstein. According to him, the project’s impact on competition may not become apparent for several years. “But the anticipation itself, fueled by every new development in spectrum and infrastructure, will likely continue to weigh on industry sentiment,” he said (as quoted by Yahoo Finance).

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