SpaceX just made cell towers cool again. Verizon, AT&T and T-Mobile pay the price

Telecommunications stocks saw significant movements on Friday. On the one hand, the actions of cell tower owners Crown Castle (CCI +9.06%) And American tour (AMT +4.08%) has soared, with shares up about 9% and 4%, respectively, as of midday. In contrast, the three largest mobile operators plunged, with Verizon (VZ -1.20%), AT&T (T. -7.96%)And T-Mobile (TMUS -7.71%) everything is plunged into red.

Both moves are due to a single company, EspaceX (SPCX +1.89%). On Thursday evening, Bloomberg reported that SpaceX was in talks to secure at least 80,000 cell sites across the United States in a bid to become the nation’s fourth-largest wireless carrier. For context, 80,000 sites would represent approximately half of all the purpose-built cell towers in the United States, so that would be a pretty big step.

Image source: Getty Images.

This is the second time in October that SpaceX has sent shockwaves through the telecommunications industry. First, on October 9, SpaceX agreed to buy $8 billion worth of low-frequency wireless spectrum, and telecom stocks plunged. So, will SpaceX really boost tower companies and cost telecom leaders money?

Why are tower companies skyrocketing?

First, a little background on how the cell tower industry works. The owner builds a tower and then rents space to wireless carriers, usually under long-term leases. The next time you pass a cell tower, take a look at the top. You will likely see multiple rings of transmission equipment, and each of them represents a tenant. Since the tower is already standing, adding tenants generates additional revenue with very little additional cost.

Since Sprint was acquired by T-Mobile, the tower business has essentially three wireless customers. The majority of Crown Castle’s rent comes from AT&T, Verizon and T-Mobile. A well-capitalized fourth player would mean more tenants per tower.

This is also a notable expansion of SpaceX’s plans. Although the company has been publicizing its telecommunications network ambitions for some time, as recently as August, management described its network as small cells mounted on rooftops (not traditional towers). But without getting too technical, purchased low-band spectrum makes large towers much more useful, so it makes sense to add them to the plan.

Of course, this isn’t the first time a “fourth carrier” has appeared. Just a few years ago, Dish Network signed long-term leases to build its own 5G network. Long story short, Dish’s parent company sold most of its spectrum in 2025 and began shutting down the network. Of course, SpaceX is a much wealthier tenant and could easily afford to build a national network.

Should investors forget about carriers?

SpaceX is certainly a threat to the big three wireless carriers, but the recent sell-off seems a bit overdone. After all, SpaceX would start without any wireless clients, it holds less spectrum than everyone else, and its service is not expected to launch commercially until late 2027. competitive the network would at least be a multi-year process.

Let’s be clear. SpaceX could certainly put pressure on the three major wireless carriers over time, but it’s not exactly a death sentence for them either. All have existed in the past with a fourth competitor (Sprint), and the pricing power has not changed. that a lot since that number dropped to three.

The essentials

If you are considering purchasing Tower Owners as part of a dynamic or telecom play at a discount, it may be wise to be patient. For one, although Crown Castle was specifically mentioned as a company SpaceX was in talks with, there is no signed contract or official acknowledgment from management yet. And the telco liquidation may be overblown, because all that’s happening now is a potential competitor (starting from scratch) negotiating with the owners.

In a nutshell, the deal is pricing in a deal that hasn’t yet been made, and the reaction from the tower owner and wireless carrier might be a bit over the top. I’m keeping an eye on certain titles concerned, but I’m waiting for the rest official developments before taking action.