Elon Musk’s SpaceX Just Played a Major Role in Challenging the Phone Industry, and Stocks of AT&T, T-Mobile and Verizon Are Crushed

Elon Musk’s SpaceX (SPCX) just sent an important message to the wireless industry: we want our share of the subscriber pie.

On Thursday evening, SpaceX announced that it would acquire a national portfolio of low-band spectrum. This allows Musk’s satellite company, Starlink, to challenge older wireless giants in the United States.

Shares of AT&T (T), T-Mobile (TMUS) and Verizon (VZ) fell on Friday’s news.

Concerns had already been growing on Wall Street that Starlink could disrupt traditional wireless carriers like AT&T, Verizon and T-Mobile by moving from a rural broadband service to a direct mobile competitor.

Following its strategic acquisition of Earth’s spectrum and rapid deployment of advanced satellites, SpaceX had laid the groundwork for launching its own autonomous cellular network alongside its direct-to-cell transmission capabilities.

SpaceX stock rose 1% on Friday.

This expansion threatens traditional operators’ high-margin businesses, emergency services and rural subscriber bases, as well as lucrative international roaming revenues.

AT&T CEO John Stankey has taken note of Starlink’s decisions, but hasn’t lost any sleep over it…yet.

“I think they’re going to find places where they clearly have a good solution,” Stankey told Yahoo Finance at the Goldman Sachs Communacopia conference in September. “In today’s airlines and flights, they have a fantastic broadband solution. In rural areas or territories, it’s a very effective way to provide good bandwidth to people. I think we see that there will be IoT type applications, like connecting vehicles that are largely outdoors and maybe have a line of sight to the sky, that they will have the ability to go in and do certain things there that we may not have also done efficiently.

Although Starlink will present competition, Stankey added, “there will also be a complementary dynamic where we will be able to solve the other 2% of the use cases that I talked about and bring our customers to these satellite operators, whether it’s Amazon or SpaceX. They will benefit from us aggregating that traffic and bringing it into the wholesale market for use.”

Brian Sozzi is the editor-in-chief of Yahoo Finance, host of the Sozzi unleashed morning show, the ‘Powerful actors with Brian Sozzi podcast and member of the Yahoo Finance editorial leadership team. Follow Sozzi on @BrianSozzi, InstagramAnd LinkedIn. Any advice on stories? Email brian.sozzi@yahoofinance.com.

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