Elon Musk’s SpaceX has agreed to acquire radio spectrum licenses that could allow its Starlink Mobile satellite service to deliver cellular connectivity inside buildings. The company said the deal would help it “become a major mobile carrier in the U.S.”
“This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America,” Musk said in a social media post on Thursday.
SpaceX, the rocket and space exploration company, is purchasing the spectrum from investment firm Grain Management, according to a filing submitted to the Federal Communications Commission.
The low-frequency airwaves can travel through walls, roofs and other structures more effectively than higher-frequency signals, addressing a key challenge for Starlink’s satellite-based mobile service.
The spectrum purchase agreement, which still needs FCC approval, would allow Starlink to combine its satellite-to-mobile transmissions with “an advanced terrestrial deployment that can seamlessly connect devices everywhere,” according to the company’s statement.
SpaceX also said the FCC has approved Starlink Mobile’s application to deploy 15,000 satellites capable of transmitting radio waves in the 2 gigahertz band and connecting directly with mobile phones.
“These airwaves are compatible with existing handsets, and we do not foresee obstacles to regulatory approval,” UBS analyst John Hodulik wrote in a note to investors. “That said, we still believe it will take time for SpaceX to scale its wireless ambitions, and the impact to near-term wireless industry fundamentals is limited.”
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SpaceX’s announcement sent telecommunications stocks lower as investors assessed the threat posed by a powerful new competitor. T-Mobile shares fell $18.58, or 11%, to $152.72 in Friday morning trading. AT&T shares dropped $1.83, or 7.4%, to $22.76.
SpaceX shares rose $2.61, or 1.6%, to $163.18.
