SpaceX’s $8 billion deal for Grain Management’s nationwide 800 MHz portfolio, up to 14 MHz of paired low-band spectrum, is the subject of this issue, so I will stick to what the market did with it. The morning after the announcement, T-Mobile fell about 10%, Verizon had its worst day since 2002, and the three carriers shed roughly $50 billion in value before lunch. AST SpaceMobile, the carriers’ preferred satellite partner, dropped 14%. Crown Castle rose 13% and American Tower 7% on the bet that a company with low-band spectrum leases towers next. Investors sold the carriers and bought the carriers’ landlords, which tells you they expect SpaceX to build on the ground.
Haven’t we seen this spectrum before? Yes. These are Sprint’s old 800 MHz licenses, which passed to T-Mobile in the 2020 merger with a divestiture requirement attached. DISH held an option to buy them for $3.59 billion and, unable to raise the money, let it expire in April 2024. The auction T-Mobile was then required to run drew no qualifying bid. T-Mobile finally sold the portfolio to Grain in a deal that closed in August for $2.9 billion in cash plus Grain’s 600 MHz licenses. Eight weeks later, Grain sold it to SpaceX for $8 billion. What was scarce was a buyer with a different cost of capital and a different reason to want it. Grain made its money on the gap between what a carrier thinks low band is worth and what Elon thinks it is worth.
The three national carriers responded predictably: with skepticism. T-Mobile president of technology John Saw wrote on LinkedIn that he has “tremendous respect” for what SpaceX has done in space, but that you cannot acquire a nationwide network overnight. Verizon said that spectrum without a network is “just empty airwaves,” and AT&T CEO John Stankey had already told Axios that SpaceX’s approach is “not a viable strategy.” All three are grading the newcomer on the asset they already own, as incumbents always do. Remember when I told you so? Right after MWC25 I published the Wolf of MWC and asked whether operators had thought through the long-term implications of signing Starlink partnerships. It looked like the early stage of disruption to me. Last summer T-Mobile took T-Satellite, its Starlink-powered direct-to-device (D2D) service, nationwide. It has since been removing the Starlink name from the service. The partner became the competitor, right on schedule.
You know the old line about disruption: first they ignore you, then they laugh at you, then they fight you. On October 1, AT&T, T-Mobile, and Verizon formally launched a joint venture to expand D2D satellite coverage across underserved parts of the US, with Paul Roth as interim CEO. First announced in May, the JV pools the carriers’ limited spectrum, sets common technical specs, and gives satellite providers one platform for reaching customers where towers do not. The announcement never mentions Starlink. Seven days later, SpaceX bought its own low band. A wholesale market for satellite partners is a sound defense against a partner, and it does nothing against a competitor who no longer needs you. Guys: this will not stop Elon. There is a better move than fighting him, and I make the case for it in this week’s blog.
The regulator is not sitting this one out. On October 6, two days before the Grain deal, the FCC’s Space Bureau approved SpaceX’s application to launch 15,000 direct-to-device satellites on the EchoStar spectrum, with half in orbit by 2032 and the rest by 2035. The next day, Chairman Brendan Carr put three items on the October 29 agenda: an auction of 25 MHz of mid-band open to satellite or terrestrial bidders, a proposal to free another 482 MHz for supplemental coverage from space, and a rule opening the lower 800 MHz cellular band to drones. The week before that, the FCC released 1,000 MHz in the 12.7 GHz and 42 GHz bands for satellite use. Amazon has filed for 5,105 D2D satellites of its own and agreed to buy Globalstar for more than $11.5 billion back in April. Spectrum policy used to be written for carriers. It is now written for coverage, from whoever provides it, and the FCC has decided satellites count. Elon may be the first fourth carrier. He will not be the last.
Here’s some background on the Mars side. In late 2024, SpaceX pitched NASA on “Marslink,” a Starlink-style constellation in Mars orbit that would relay data to Earth at well above the 4 Mbps the agency asked for. But instead NASA selected Blue Origin on September 1. The $700 million contract is to develop the Mars Telecommunications Network, deliver the orbiter by December 2028, and have the network running around 2030. Then on October 6, two days before the spectrum deal was announced, Starlink VP Michael Nicolls said Starlink plans to “form an interplanetary mesh of connectivity” linking Earth, the Moon, and Mars, and Elon followed up: “SpaceX will provide connectivity throughout the solar system and beyond.” Media coverage is treating these as separate stories. They are one story, and it is the one I told a year ago: on the way to Mars, telco is in the way.
