T-Mobile US shares fell 5% on Friday after Bloomberg reported that SpaceX wants to lease 80,000 cellphone towers and build a fourth major U.S. mobile carrier. The move follows SpaceX's $8 billion spectrum purchase two weeks earlier.
T-Mobile US stock fell 5% through 11:15 a.m. Friday as investors reacted to a new Bloomberg report. The report says Space Exploration Technologies, already the leading player in satellite-based communications, is angling to lease 80,000 cellphone towers on the ground.
SpaceX also plans to build a fourth major mobile telecommunications company to compete with T-Mobile, Verizon and AT&T.
SpaceX builds on its spectrum purchase
Two weeks ago, SpaceX announced it is paying $8 billion to buy "up to 14 megahertz of paired spectrum in the 800 MHz band" from the private equity firm Grain Management. SpaceX predicted the purchase would pave the way for Starlink Mobile to become a major U.S. mobile carrier.
The tower lease would be the next step. Assuming the reports are true, the towers would supplement the 15,000 direct-to-cell Starlink satellites that SpaceX is asking the FCC to let it launch.
Margins point to the pressure on T-Mobile
The Motley Fool's read of SpaceX's most recent earnings report shows 45% operating profit margins from its Starlink "Connectivity" business, versus less than a 6% margin in artificial intelligence and negative profits in space launch. The report's author says it makes sense for SpaceX to double down on the business that works best for it.
T-Mobile's operating margins are only 22% today, according to the same article, which expects them to fall further with new competition from SpaceX.
T-Mobile shares traded at $150.72, down 5.08%, as of 11:41 a.m. ET, within a day's range of $149.61 to $154.82.
Source: The Motley Fool
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