SpaceX is seeking access to as many as 80,000 cell sites as it moves to challenge the market share of AT&T and the two other major U.S. wireless carriers, and Wall Street analysts see the push as a key clue to the company's next-generation network strategy.
Experts say SpaceX's target extends well beyond conventional cell towers, CNBC reported on the 25th, local time. Along with towers, the company is looking to turn building rooftops, billboards, water tanks, distributed antenna systems (DAS) and small cells into new network nodes.
"Cell sites and cell towers are often used interchangeably, but cell sites include a variety of locations beyond towers, such as rooftops, water tanks and small cells," Goldman Sachs analyst Michael Ng wrote in a note to clients on the 24th. Citigroup analyst Michael Rollins also raised the possibility that SpaceX is reviewing various forms of small-scale cell sites to expand coverage, separate from leasing space on large towers.
Wall Street reads the move as an attempt to shift from relying on partners to an "owner economics" model in which SpaceX directly controls network infrastructure. "The push to lease cell sites on a large scale makes SpaceX's intent to build its own network that much clearer," Bernstein analyst Laurent Yoon said.
The news sent shares of telecom infrastructure firms and incumbent carriers in opposite directions. Crown Castle, which is reported to be in talks with SpaceX over cell site access, jumped 9% on the 24th, and American Tower rose 4%. AT&T fell 7.96% and T-Mobile dropped 7.71% as concerns mounted over intensifying competition.
Wall Street expects SpaceX to build an outdoor mobile network by combining its residential Starlink wireless service with spectrum it recently secured. Earlier this month, SpaceX agreed to buy 800-megahertz low-band spectrum, which penetrates building walls and windows well, from Grain Management.
Still, some analysts say the three incumbents' oligopoly is unlikely to be shaken overnight. AT&T CEO John Stankey drew a line under SpaceX's prospects for market penetration at an earnings call on the 21st, saying it takes years and enormous capital investment to deliver the level of network performance customers expect.