SpaceX agrees to buy spectrum for about $8 billion as telecom stocks fall
Key Facts
U.S. and European telecom stocks fell during trading on 9 October 2026 after SpaceX's agreement to buy U.S. spectrum stoked investor concerns about increased competition in mobile services. Reuters valued the deal at about $8 billion, citing a person familiar with the discussions. According to a statement from law firm Milbank, the agreement provides for the purchase of 100% of Grain Management's nationwide 800 megahertz portfolio. The agreement includes the entire U.S. portfolio in the purchase, which aims to support Starlink Mobile services. The selloff in operators' shares reflected investor concerns about satellite communications services' ability to compete with traditional mobile networks and their market shares.
T-Mobile US shares fell 13.2% during trading, according to Reuters' coverage of the session in which the news broke, while Deutsche Telekom shares dropped 7.9%. The decline spread to France's Orange, which lost 2.5%, and Spain's Telefonica, whose shares fell 4.6%. Across the European sector, the STOXX 600 telecommunications index fell more than 2.9%. The decline pushed it to its lowest level since 30 January, according to Reuters, as pressure on European companies' shares broadened. T-Mobile US's loss exceeded the declines recorded by the European companies mentioned, in a session that saw selling hit operators on both sides of the Atlantic.
The deal aims to enable Starlink Mobile to reach customers using terrestrial and satellite networks, according to Milbank, combining both communications channels in the planned service. The firm said the agreement allows the service to "reach customers from both land and space." Reuters reported that most existing mobile phones support the spectrum band covered by the portfolio. This compatibility reduces the need to buy dedicated satellite phones to use the services, according to the news agency. Investors' concerns stem from the possibility of providing satellite connectivity to users of conventional mobile devices, while turning the agreement into actual commercial competition depends on approvals, implementation and the construction of the necessary ground infrastructure.
The portfolio targeted for purchase stems from an earlier transfer that T-Mobile announced it had completed to Grain Management, according to a statement from the U.S. company. T-Mobile received $2.9 billion in cash in that transaction, along with all of Grain's 600 megahertz licences. The consideration received by the company thus combined cash and spectrum licences as part of the deal to transfer the portfolio to Grain. SpaceX's current agreement was also preceded by an agreement to buy licences from EchoStar for about $17 billion, according to EchoStar's statement filed with the U.S. Securities and Exchange Commission. That earlier agreement covered licences in the "AWS-4" and "H Block" bands, in another step to expand SpaceX's spectrum portfolio.
In contrast to mobile operators' losses, tower companies bucked the sector's trend and posted gains during the session in which the news broke, according to Reuters. Shares in American Tower, Crown Castle and SBA Communications rose between 6.5% and 13.3%. Morgan Stanley analysts believe SpaceX's expansion may require equipment deployments on towers and rooftops, alongside small cells. These requirements could, in their assessment, support demand for ground infrastructure serving communications networks. Trading showed a divergence between concerns about competition facing traditional operators and expectations attributed to analysts about the new network's need for ground sites and equipment.
Against the backdrop of competition over coverage, AT&T, T-Mobile and Verizon announced an agreement to establish a joint venture, according to a Verizon statement. The venture aims to expand coverage in underserved U.S. areas under arrangements bringing together the participating mobile companies. Verizon said "operators' existing agreements with satellite companies will remain in effect." Operators thus retain their existing agreements with satellite connectivity providers under the joint venture arrangements. The move combines cooperation among the companies to expand service coverage with the continuation of their existing relationships with satellite companies, at a time when the SpaceX deal has raised investor concerns about competition.
The next step for the SpaceX-Grain agreement is to obtain approval from the U.S. Federal Communications Commission and meet customary closing conditions, according to Milbank. The firm said completion of the transaction is "subject to FCC approval and other customary closing conditions." The commission previously approved a conditional pathway for deploying direct-to-device communications services as part of its earlier approval of Grain's purchase of the portfolio. That earlier framework included a competitive selection process, according to Milbank's description of the regulatory arrangements associated with the portfolio. Approval of its transfer to SpaceX, followed by deployment of the network and the necessary ground infrastructure, remain steps toward turning the spectrum agreement into services that compete commercially with operators.