Markets
AT&T and T-Mobile Fell Almost 8% and Crown Castle Rose 9% on a Report That SpaceX Wants 80,000 US Cell Sites for a Fourth Carrier
AT&T fell 7.96% and T-Mobile 7.71% on Friday after Bloomberg reported SpaceX is negotiating access to at least 80,000 US cell sites. The idea is a fourth national carrier built on towers the incumbents already rent, and nothing has been signed. The landlords rallied instead: Crown Castle rose 9.06%, American Tower 4.08% and SBA Communications 3.57%. Verizon, which reports on Monday, lost only 1.19%.
Two days after AT&T fell 6.45% on a quarter that beat estimates, because 379,000 phone additions missed and the call kept returning to Starlink Mobile, the market had a more specific reason to worry. Bloomberg reported late on Thursday that SpaceX is in talks for access to at least 80,000 US cell sites to build a fourth national wireless carrier. No agreement has been signed and no terms were reported. On Friday AT&T fell 7.96% to $20.93 and T-Mobile 7.71% to $146.54, and the communication services sector was one of the reasons the S&P 500 lost 0.52%.
The logic of the trade is in who would supply those sites. A national network needs tens of thousands of antenna locations, and in the United States most of them belong to three tower companies that lease space to every carrier. A new tenant on existing towers is close to pure profit for the landlord. Crown Castle rose 9.06% to $85.97, its highest close since June, American Tower 4.08% to $188.97 and SBA Communications 3.57% to $184.75. The intraday highs were higher still, $91.45 for Crown Castle and $202.50 for American Tower, about 11.5% above Thursday's close, so roughly half of the morning's excitement was sold before the bell.
SpaceX itself rose 1.89% to $147.49, a modest move for the company at the centre of the story, after falling 9.1% on Thursday in the AI sell-off. Its own third-quarter report had already shown how fast the connectivity business is growing: revenue in that segment rose 69% to $5.2 billion, and Starlink added 1.6 million subscribers to just under 14 million. A terrestrial network on rented towers would let it sell phone service in cities, where satellites alone struggle, and compete directly with the three companies that today split almost the whole US market.
Verizon fell only 1.19% to $44.66, and it is the next test. It reports before the open on Monday, October 26, with analysts expecting adjusted earnings of about $1.27 a share on revenue near $34.85 billion. The company has guided full-year postpaid phone additions to the upper half of a 750,000 to 1 million range. After this week, the number of phones added may matter less than what management says when it is asked, as AT&T's chief executive was, about a satellite company that now wants towers too.
One caution about Friday's prices: they rest on a report of negotiations, not a contract, and the 80,000 figure is a floor, not a plan. Building a fourth carrier has been tried before, by Dish Network, and proved slow and expensive. What the market priced was not that SpaceX will succeed, but that the incumbents have lost the assumption that nobody would try again.