T-Mobile's stock price tumbled 10.8% at one point during the session, Verizon fell by 7.2%, and AT &T dropped 7.1%. This wave of selling continued the decline from after-hours trading on Thursday and spread to European telecom stocks as well.
The catalyst that triggered the sell-off was a spectrum transaction worth approximately $8 billion involving SpaceX. This transaction could ultimately allow Elon Musk's company to compete directly for mobile users, rather than merely providing satellite coverage for existing operators.
Why have telecom stocks fallen today?
SpaceX stated in an official announcement that it plans to acquire up to 14 megahertz of nationwide paired spectrum, with the frequency band located at 800 MHz.
This agreement with Grain Management will enable Starlink Mobile to combine satellite connections with traditional terrestrial wireless infrastructure.
Low-frequency spectra are particularly valuable because they can travel over longer distances and are also more capable of penetrating buildings than high-frequency signals.
This may help Starlink overcome the limitations that have long hindered the replacement of traditional mobile networks with satellite services.
Initially, investors' reaction to this Starlink spectrum transaction was a general decline of about 7% in the stock prices of major US operators. The deeper selling on Friday indicates that market concerns have intensified.
The threats faced by T-Mobile are particularly complex.
T-Mobile has already collaborated with Starlink to provide satellite connectivity in areas without traditional cellular coverage.
However, the expansion of SpaceX into terrestrial wireless services may ultimately turn this relationship into direct competition.
Starlink The rapidly expanding connectivity business reported quarterly revenue of approximately $4.3 billion, indicating that its business scale is growing.
AT &T is advancing a competitive satellite strategy in collaboration with Amazon Leo, and Verizon may also face similar pressures, necessitating the enhancement of its own satellite capabilities.
The sell-off also affected Europe. Deutsche Telekom's stock price fell by about 7.9%, reflecting market concerns that competition in satellite infrastructure may extend beyond the United States.
