The Scoop
Elon Musk is coming for your cell phone network.
SpaceX, which is trying to fill a hole in its airwaves crucial for a full-service wireless network, has been hunting for spectrum that works well in cities and dense areas, according to people familiar with the matter. The company is considering buying competitors to acquire the spectrum or competing at a government auction set for next year, the people said.
It is the most recent sign that Musk’s Starlink plans to compete directly with AT&T, Verizon, and T-Mobile. Musk’s SpaceX has taken other steps into the conventional telecommunications business. President Gwynne Shotwell demonstrated a prototype mobile handset to some investors earlier this year, the Wall Street Journal reported. The Financial Times also reported that Shotwell had expressed interest in building their own terrestrial networks.
Shares of AT&T, T-Mobile, and Verizon fell 4% in response to Semafor’s report.
SpaceX wants to grow its Starlink mobile business, which analysts expect to hit $15 billion in revenue this year and which SpaceX, in its IPO pitch to investors, pegged at $740 billion market. SpaceX is working on new technologies to improve Starlink’s coverage in tree-covered areas and inside buildings, and Musk has also said he’s considered building a hybrid satellite-terrestrial network to bolster the service.
Meanwhile, the big three mobile providers have spent $110 billion over the last decade hoovering up most of the US’ low-band spectrum.
Asked directly about whether he would purchase a carrier, Musk in September 2025 said on the All-In podcast: “It’s not out of the question. I suppose that may happen.” Such a transaction would be in the hundreds of billions of dollars even before tacking on a deal premium, and the incumbent carriers are generally not seen as sellers.
SpaceX’s plans are fluid, and the company could ultimately choose not to follow through, the people said. Building a network is capital intensive, requiring continuous, steady investment in both towers and spectrum —- drawing capital away from businesses that investors more richly reward, chiefly AI.
SpaceX did not return a request for comment.
That C-band spectrum is set to go up for auction next year and has both satellite and terrestrial applications. If SpaceX competes in those auctions, it could force legacy carriers to incur unsustainable amounts of debt —they already have high costs of capital and are more debt-laden than SpaceX. SpaceX could opt to issue new shares to cover the cost, structuring it similarly to when it bought Cursor in a $60 billion all-stock deal last month.
Musk also bought spectrum licenses from Charlie Ergen’s Echostar in a $17 billion deal.
Rohan’s view
Plenty of incumbents have brushed off the threat Elon Musk posed to their businesses and regretted it. “I remain unconvinced of the economic viability of the model that he’s pitching,” Fiat Chrysler Sergio Marchionne said of Tesla in 2017 (Tesla shares are up 1,900% since that remark; Stellantis shares are up 43%.) Legacy satellite executives dismissed the threat Starlink — and SpaceX’s economies of scale — represented. Short sellers have lost millions betting against Musk’s various businesses.
Telecommunications executives have taken a similar tack, at least in public. “The reality is that they’re coming to the game very late after this industry has been established,” AT&T CEO John Stankey said of Starlink’s ambitions last week.
But get them in their cups or away from their talking points, and many of them have recently cottoned on to two facts: Musk is coming for their business, and he can do it far cheaper than any of them can. He’s the only CEO — running the only businesses — where he could, theoretically, announce that he was issuing $100 billion of fresh equity to trounce telecom companies at auction bidding rights and have his stock go up.
Which leaves telecom executives in a tricky spot: do they sell or do they fight? They can’t compete with his cost of capital — even with its shares down lately, Musk is a furious fundraiser — or the X factor that has propelled his net worth and his companies to unrivalled heights. As unthinkable as it might be, selling will likely be the best course.