Bloomberg reported that SpaceX is discussing access to as many as 80,000 cell sites as SpaceX seeks market share from the Big Three telecom companies. SpaceX is reportedly negotiating with Crown Castle over access to cell sites. Analysts say the discussions could reveal more about SpaceX's telecommunications ambitions.
Goldman Sachs analyst Michael Ng distinguished cell sites from cell towers in a Friday client note following Bloomberg's reporting. Ng said cell sites encompass towers but can also include rooftops, billboards, water tanks, distributed antenna systems and small cells. The distinction may give SpaceX additional types of real estate to use. Citi analysts also questioned which types of coverage SpaceX wants, suggesting smaller cell towers could be involved. Citi analyst Michael Rollins said Citi's scenarios interpret the reporting as more than 80,000 macro sites on colocation structures. However, Rollins acknowledged that some locations could provide other kinds of coverage or capacity, including small cells.
Bernstein analyst Laurent Yoon said in a Friday note that large tower leases would reinforce indications from recent spectrum purchases about SpaceX's strategy. Yoon said SpaceX appears increasingly prepared to pursue the economics of ownership instead of depending on partners. Tower stocks have risen this month, helped by Grain Management's announcement that Grain Management would sell a nationwide spectrum portfolio to SpaceX. American Tower shares gained 4% on Friday. Crown Castle shares rose 9% on Friday. Telecom shares fell as investors weighed stronger competition from SpaceX. AT&T shares declined almost 8%. T-Mobile shares dropped more than 7%.
Some Wall Street analysts believe SpaceX may intend to build outdoor networks from SpaceX's residential Starlink wireless networks. SpaceX agreed earlier this month to buy low-band, 800 MHz spectrum from Grain Management. The spectrum can penetrate walls and windows.
Pivotal Research Group analyst Jeffrey Wlodarczak said in a note earlier this month that the 800 MHz coverage layer can carry most calls and texts. Wlodarczak said fixed households can shift much of that traffic to Starlink WiFi indoors. Wlodarczak cited an observation attributed to Comcast that Comcast customers already use home WiFi for data rather than Comcast's virtual network arrangement with Verizon. Wlodarczak said the same pattern applies to fixed Starlink customers, whose phone use mostly remains on WiFi supplied through the dish.
SpaceX faces a difficult task in displacing the Big Three telecom companies despite the stock market reaction to SpaceX's recent telecommunications activity. AT&T CEO John Stankey said during AT&T's October 21 earnings call that achieving customers' expected performance levels takes many years and substantial investment.
SpaceX Explores 80,000 Cell Sites to Challenge Big Three Telecoms
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Summary
SpaceX is in talks to access up to 80,000 cell sites, including towers and small cells, to expand its telecom reach. The move has sparked interest in altcoins to watch as market sentiment shifts. The company recently acquired 800 MHz spectrum, which supports voice and text traffic. Telecom stocks like AT&T and T-Mobile fell as the fear and greed index shows growing unease over competition. Analysts from Goldman Sachs and Citi are tracking the potential coverage impact.
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