Stocks
Verizon, AT&T and T-Mobile slide after hours on report SpaceX is seeking access to 80,000 US cell sites
A Bloomberg report that SpaceX is negotiating with tower owners to build a fourth national carrier hit the incumbents and lifted Crown Castle nearly 10% in late trading.
HedgeWeekly News Desk ·
Shares of AT&T, Verizon and T-Mobile fell between 4.2% and 5% in extended trading on Thursday after Bloomberg News reported that SpaceX is in talks with cell-tower operators for access to at least 80,000 US sites, according to Reuters. The report, citing people familiar with the matter, said the leases could help SpaceX build a fourth nationwide wireless carrier on the ground to work alongside its satellite network. Verizon had closed the regular session up 3.74% at $45.20.
Tower owners moved the other way. Crown Castle, named as one of the operators in talks, rose nearly 10% after hours, Investing.com reported, while SpaceX shares gained about 1%. Crown Castle's chief executive declined to discuss specific negotiations on the company's earnings call this week but said it was talking to all the major satellite-based telecom providers. SpaceX, Crown Castle, American Tower and privately held Vertical Bridge did not immediately respond to Reuters' requests for comment.
The scale is large relative to the US tower base. Crown Castle runs about 40,000 US towers, American Tower about 42,000 sites and Vertical Bridge about 18,000; 80,000 sites would be roughly half of the 158,500 purpose-built cell towers operating in the US last year, according to Wireless Infrastructure Association figures cited by Reuters. TD Cowen estimates a nationwide terrestrial network would cost more than $80 billion and take many years to build. SpaceX is also buying nationwide low-band spectrum, Reuters said.
For investors, the report cuts in opposite directions for carriers and landlords. Tower owners have been losing rent from DISH: Crown Castle said DISH terminations reduced its third-quarter site rental billings by $61 million, helping push organic billings growth to minus 3.1%, so a large new tenant would address its weakest line. For the three incumbents, the risk is a new rival able to pair ground sites with satellites. No deal has been announced, and Verizon's third-quarter results, due before Monday's open, give management the first chance to respond.