Musk’s Spectrum Push Puts US Wireless Carriers on Edge

SpaceX Moves to Buy Low-Band Spectrum

Signals Plan to Combine Satellites, Mobile Phones and Ground Networks

Nationwide Service Possible Without Replacing Devices

Elon Musk’s SpaceX is stepping up its push into the US wireless market. As the company fleshes out a plan to provide cellphone service nationwide by combining Starlink satellites with terrestrial networks, expectations are growing that the competitive landscape for US mobile carriers could be disrupted.

SpaceX has agreed to acquire nationwide 800-megahertz spectrum licenses held by investment firm Grain Management, Bloomberg reported on October 9. The terms were not disclosed. The deal requires approval from the Federal Communications Commission before it can be completed. SpaceX said the transaction would serve as a springboard toward its goal of becoming a major US mobile carrier.

Musk wrote on social media platform X the previous day that the spectrum would be “the final critical piece of the puzzle” needed to provide full cellphone service across the US. The company’s plan is to add a terrestrial network to Starlink’s direct-to-cell service, creating a communications system that works both indoors and outdoors.

The market reacted immediately. As of 5 p.m. in after-hours trading on October 8, AT&T shares had fallen 7.3%. T-Mobile US and Verizon were each down 6.6%. SpaceX shares, by contrast, rose 1.5%. The moves suggest investors see satellite communications as a potential competitor for subscribers, not just a complement to existing wireless service.

At the heart of the deal is low-band spectrum that can expand coverage. Signals in the 800-megahertz range are better at penetrating obstacles such as walls, allowing service to reach phones inside buildings. SpaceX plans to use its existing 2-gigahertz spectrum for data capacity and the new frequencies to bolster coverage in hard-to-reach areas, including indoors.

Another advantage is that most mobile devices already support the band, eliminating the need for consumers to buy satellite-specific phones. The licenses cover nearly all of the US. That gives SpaceX a foundation for a nationwide business while allowing it to offer the service on existing handsets.

SpaceX began building its wireless business last year with a major spectrum acquisition agreement involving US telecom company EchoStar. It agreed last year to buy 50 megahertz of spectrum and related rights for $17 billion, and in November agreed to acquire up to an additional 15 megahertz for $2.6 billion.

The key question is whether regulators approve the effort and whether satellite and terrestrial networks can be integrated as planned. SpaceX believes satellite and ground-based communications can coexist in the same band. Even so, broader service expansion will require both an FCC decision and network construction.

Oh Se-sung, Hankyung.com reporter sesung@hankyung.com