Handelsblatt1 hour agoBusiness1 min readGermany

Low frequencies: SpaceX challenges US mobile operators – frequency purchase weighs on T-Mobile US & Co

Quick Look

SpaceX has acquired a nationwide portfolio of low-frequency spectrum from Grain Management to offer cellular connectivity directly to smartphones via Starlink satellites.
The purchase overcomes a technical hurdle for satellite-based networks because low frequencies penetrate obstacles better.
The FCC still has to approve the deal.

AI-generated summary

Why It Matters

SpaceX already operates Starlink satellite internet and is working on expanding to include cellular services via satellites. The use of low-frequency spectrum enables better signal penetration through buildings and vegetation, which is crucial for widespread cellular service.

Font size

Starbase. The space company SpaceX with its satellite operator Starlink is challenging established US mobile phone providers such as T-Mobile US and Verizon. SpaceX agreed on Thursday to purchase a nationwide portfolio of low-frequency spectrum in order to offer future cellular connections directly from space on smartphones.

The seller of the 800 megahertz frequencies is the financial investor Grain Management, which is selling its entire portfolio. Financial details were not disclosed.

With the acquisition, entrepreneur Elon Musk's SpaceX is overcoming one of the biggest technical hurdles for satellite-based mobile networks. The low frequencies can penetrate obstacles such as walls or trees better. They are intended to complement Starlink Mobile's existing global 2 gigahertz spectrum, which is designed for high bandwidths. The deal still needs to be approved by the US Federal Communications Commission (FCC).

The move caused unrest on the stock market as investors feared an aggressive price war in the already saturated US mobile phone market. Shares of T-Mobile US, Verizon and AT&T each fell more than five percent in after-hours US trading.

This week, the FCC also approved the application for Starlink Mobile's second generation of satellites. This allows SpaceX to launch 15,000 satellites into space that are optimized worldwide for the 2 gigahertz spectrum.

What to Watch

AI outlook — possibilities, not facts

The FCC will approve SpaceX's spectrum purchase, possibly with fair competition requirements.
Likely · Within months
T-Mobile US, Verizon and AT&T will increase their own investments in network expansion and 5G deployment to remain competitive.
Possible · Within months

Open Questions

How high was the purchase price for the spectrum portfolio?
When is the FCC expected to decide on the approval?
What technical standards will SpaceX use for satellite-based cellular communications?
How will existing mobile operators react to the new competition?