SpaceX Pursues Wireless Back Door After Verizon, T-Mobile, AT&T Reportedly Said No

Space Exploration Technologies Corp. (NASDAQ:SPCX) shares are trading modestly higher Monday after a Washington Post report that SpaceX is seeking a back door into the U.S. wireless market after the major carriers rebuffed its requests for network access. Shares of Verizon Communications Inc. (NYSE:VZ), T-Mobile US Inc. (NASDAQ:TMUS) and AT&T Inc. (NYSE:T) are trading lower today.

• SpaceX stock is gaining positive traction. Why is SPCX stock advancing?

SpaceX Carrier Talks with Verizon, T-Mobile, AT&T Fell Through

According to The Washington Post, which cited nearly a dozen people in the telecom industry speaking anonymously, Elon Musk approached the heads of America’s top carriers in recent months and asked them to give SpaceX access to their networks so it could launch its own mobile phone service. Verizon, T-Mobile and AT&T all said no, the Post reported. The possibility of SpaceX securing an agreement to operate a mobile network has rattled the carriers, according to the report.

SpaceX Weighs Boost Mobile Path into Wireless

The Post reported that SpaceX has held talks with Boost Mobile’s parent company, EchoStar Corporation (NASDAQ:ECHO), in recent months about launching its own wireless service, and that Musk met EchoStar chairman Charlie Ergen last month, according to two people familiar with the negotiations. A deal could involve SpaceX acquiring Boost or gaining access to its network, which Boost leases from AT&T and T-Mobile. Three of the people said a carrier’s lease agreement typically can’t be transferred to a new buyer without the carrier’s permission, so the proposed service may need consent from those carriers. MoffettNathanson estimates the U.S. wireless market is worth $235 billion.

SpaceX Eyes Major Carrier Status as Analysts Flag Hurdles

On SpaceX’s recent earnings call, CFO Bret Johnsen said the company aims to become a major mobile carrier in the United States. The Post reported that SpaceX agreed earlier this month to buy $8 billion of wireless spectrum licenses. "This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America," Musk said on X. Last week, Bloomberg reported that SpaceX wants at least 80,000 cell sites to build its own network.

Analysts see obstacles. Satellite analyst Tim Farrar said SpaceX’s satellite signal isn’t currently strong enough to support indoor and urban coverage, and a deal with a carrier like Boost could let it provide service over existing towers in the meantime. Verizon’s CEO has said it would take SpaceX four to six years to build the needed infrastructure, while Musk has estimated about half that.

SpaceX Shares Edge Higher

SPCX Price Action: At the time of writing, SpaceX shares are trading 1.65% higher at $136.95, according to data from Benzinga Pro.

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