Elon Musk’s SpaceX doesn’t just want to broadcast the Internet from space. He wants to sell you a phone plan, and the companies that own the cell towers are already profiting from it.
SpaceX (SPCX) is in talks to gain access to at least 80,000 U.S. cell sites, Bloomberg reported Thursday, a step toward building a fourth national carrier.
Crown Castle (CCI) is up double digits on Friday, closely followed by American Tower (AMT) and SBA Communications (SBAC). AT&T (T) and T-Mobile (TMUS) are down, and Verizon (VZ) is also down.
The largest tile on this map is SpaceX itself. At around $2 trillion, its value is about three times that of all six phone and tower companies combined, according to calculations by Yahoo Finance.
This is the second time this month that the two groups have split so badly. On October 9, SpaceX agreed to pay about $8 billion for a national block of wireless airwaves. Tower stocks surged and aircraft carriers sank by double digits that day. Since then, Crown Castle is up 27% and AT&T is down 14%.
Eighty thousand sites is a big ask. That’s about half of the 158,500 cell towers in the United States, according to the Wireless Infrastructure Association. American Tower has about 41,000 locations in the United States and Canada, and Crown Castle has about 40,000.
Landlords’ best tenants are those who suffer
AT&T, Verizon and T-Mobile generate about 85% of American Tower’s revenue in the United States and Canada. For the owners of the tower, SpaceX would be a new tenant. For carriers, it would be a new rival.
The market takes this into account. Carriers lost about $21 billion in market value Friday, while tower stocks added about $9 billion.
Crown Castle CEO Chris Hillabrant didn’t name names during Wednesday’s earnings call, but he left the door open. “You can assume we talk to all parties,” he said.
Nothing has been signed yet. Negotiations are still far from a formal leasing agreement, and some see it as a bargaining chip in SpaceX’s relationships with carriers. Better satellites could also mean SpaceX needs fewer towers than it is asking for.
The next test will take place on Tuesday, when American Tower reports its results. Watch if management talks about SpaceX as a customer or if the recovery starts to calm down.
In-house AI tools helped analyze interview transcripts, research, and write this article. Humans reviewed, edited and fact-checked the material before publication.
Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on @SPYJared or email him at jaredblikre@yahooinc.com.
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