Telecoms stocks sink on SpaceX push to become major US wireless carrier

(Sharecast News) - Telecom stocks on both sides of the Pond fell sharply on Friday after SpaceX moved a step closer to turning its Starlink division into a US nationwide wireless carrier. SpaceX, which already offers basic fixed broadband via low-Earth orbit satellites, is reportedly spending $8bn in cash to buy a portfolio of low-band, 800MHz spectrum from investment firm Grain Management.

The assets are suited for wireless from cellphone towers, as opposed to satellites, and is thought to be part of SpaceX's push to compete with American telecom majors such as AT&T and Verizon.

"This prime low-band spectrum addresses one of the key remaining technical gaps that will pave the way for Starlink Mobile to become a major mobile carrier in the U.S.," SpaceX founder Elon Musk said in a post on X.

AT&T and Verizon futures were both down over 7% in pre-market trading on Wall Street, while European carriers Telefonica, BT, Orange and Deutsche Telekom also dropped on the news.

The deal still needs approval from the Federal Communications Commission, but comes just a month after president Donald Trump purchased $5m of SpaceX bonds, according to an ethics filing made public this week.

The transaction further fueled conflict-of-interest concerns about the president's personal investments, and took place just two days before Trump signed a memorandum "to reinvigorate America's leadership in space transportation", aimed at cutting red tape for commercial space travel.

The White House said the president's investment portfolio is "independently managed by third-party financial institutions".