Elon Musk’s SpaceX is moving towards expanding its satellite-based mobile network across the United States following a proposed $8bn acquisition of wireless spectrum licences from investment firm Grain Management.
The Federal Communications Commission (FCC) announced on November 10 that it had accepted a filing from Starlink Spectrum Holdings, a SpaceX subsidiary, seeking approval to purchase 800 MHz of Specialised Mobile Radio Service licences from Grain Management.
Musk had previously described the spectrum acquisition as “the last critical piece of the spectrum puzzle needed for SpaceX (NASDAQ:SPCX) to provide complete phone coverage in America”.
The proposed transaction, which was first reported by the Wall Street Journal, is expected to cost approximately $8bn.
In an October regulatory filing announcing the planned purchase, SpaceX said the deal would “ensure all Americans have access to high-speed mobile broadband no matter where they go.”
The FCC also highlighted the potential reach of the proposed service, saying the expanded coverage, which would rely on wireless connections through cellphone towers, could extend to “approximately 100% of the U.S. population.”
However, the development could intensify competition between SpaceX and the country’s major mobile network operators, Verizon, AT&T and T-Mobile.
The three companies had reportedly turned down previous requests from Musk to allow his mobile service to use their existing networks.
Through their industry association, CTIA, the carriers also warned the FCC that expanding the availability of radio spectrum could affect existing network capacity.
They argued that a broader spectrum allocation “have real consequences for consumers who rely on ever-increasing wireless capacity to access the modern economy and support their day-to-day living.”
T-Mobile separately approached the FCC, raising concerns that making additional spectrum bands available could undermine the quality of service on 5G networks.
In October, Verizon, AT&T and T-Mobile also announced a joint satellite partnership aimed at extending connectivity to underserved communities across the United States.
SpaceX has already made a major investment in the wireless spectrum market, spending $17bn to acquire spectrum from EchoStar, the parent company of Boost Mobile. The FCC approved that transaction in May.
Responding to the latest development, a T-Mobile spokesperson told Moneywise that the company welcomed competition but maintained that building a reliable mobile network required more than access to spectrum and infrastructure.
“We welcome competition because it pushes us to be better and creates more value for customers. Spectrum and towers alone don’t make a network. Building a leading wireless network, providing top-of-class service and earning customer trust take significant time, investment and expertise. Satellite technology has an important role in extending connectivity, but it’s complementary to terrestrial networks,” the spokesperson said.
