SpaceX could soon enter the consumer mobile phone market, and telecom companies are taking the threat seriously. On Monday, Verizon shares dropped 6.5%, AT&T fell 4.9%, and T-Mobile lost 4.6%, making them some of the S&P 500’s worst performers. Two reports released Friday triggered the sell-off and suggest that competition from Elon Musk’s company may arrive sooner than expected. Here’s what the reports reveal and what it could mean for each carrier.
According to Bloomberg, Charter Communications has discussed partnering with SpaceX to offer a consumer mobile phone service in the U.S. Charter might also route some SpaceX phone traffic through its own internet network. The Financial Times separately reported that SpaceX told investors it plans to launch a Starlink mobile service for U.S. customers. Both Charter and SpaceX declined to comment.
A Charter-SpaceX mobile phone could hurt T-Mobile the most, since T-Mobile already partners with SpaceX for direct-to-cell satellite service in the U.S. If SpaceX teams up with Charter, it could weaken T-Mobile’s current deal. For Verizon and AT&T, whose fiber internet competes with Starlink broadband, this new threat adds to the pressure from Starlink’s growing base of about 12 million subscribers.
On Monday, Comcast announced plans to spin off NBCUniversal and Sky into a separate media company, adding more signs of disruption in the cable and telecom industries.
Until now, most telecom companies saw Starlink as a niche product for rural broadband, not as a major competitor. But Monday’s market reaction shows that opinion is shifting. Earlier this month, Oppenheimer called SpaceX a company that could disrupt the $1.6 trillion global communications industry. The sharp declines on Monday suggest Wall Street is starting to take that warning seriously.
