Verizon, T-Mobile and AT&T shares sank on Friday after SpaceX announced an agreement to buy a nationwide spectrum portfolio. Verizon was pacing for its worst day since 2002, while SpaceX stock edged higher. Analysts at JPMorgan still see limited near-term risk to U.S. wireless incumbents.
Telecommunications stocks sold off on Friday after SpaceX announced an agreement to purchase a nationwide spectrum portfolio, aiming to expand its Starlink internet into mobile service.
Verizon, T-Mobile and AT&T fall on SpaceX news
Verizon was down roughly 10% on the news and was pacing for its worst day since 2002. T-Mobile dropped 13% while AT&T fell around 10%, each on track for their own worst days since 2013 and 2000, respectively.
SpaceX stock, by contrast, climbed around 1% for the day.
What SpaceX is buying
The deal includes acquiring spectrum from Grain Management. In a Thursday statement, SpaceX described it as a license portfolio of up to 14 megahertz of paired spectrum in the 800 MHz band.
The FCC will oversee approval of the deal. FCC Chair Brendan Carr told CNBC that competition in the spectrum market was good for consumers. According to Carr: "really good news for the American consumers." He added that the FCC will probably bring over $100 billion of spectrum into the market over the next two years.
Analysts weigh the threat to incumbents
Multiple SpaceX analysts lauded the deal. Evercore ISI wrote that the rocket maker now has the outline of a real network alongside its existing satellite capabilities, and JPMorgan wrote that the acquisition made Starlink Mobile's long-term opportunity more credible.
However, JPMorgan analysts added in a Friday note that they continue to see limited near-term risk to U.S. wireless incumbents, given the time, infrastructure and capital required to build a competitive terrestrial network.
Source: CNBC
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