SpaceX agreed on Thursday to buy a nationwide set of low-band airwaves in the United States. The deal moves Elon Musk’s company closer to competing directly with America’s big mobile operators from space.
SpaceX will pay about US$8-billion in cash to private equity firm Grain Management, the Wall Street Journal reported. The newspaper cited people familiar with the matter. The two companies did not share the financial terms.
“This company can have tons of spectrum available, but if they do not have the network to use it, it doesn’t matter. It’s just empty airwaves,” Verizon spokesman Rich Young said.
The deal covers all of Grain Management’s nationwide 800MHz spectrum. Grain bought these airwaves from T-Mobile earlier this year. The sale still needs approval from the US Federal Communications Commission (FCC).
Low-band signals travel long distances and pass through walls and trees. This helps solve one of the main problems for mobile networks that use satellites. Most phones already support the 800MHz band, so users will not need special satellite phones.
Starlink Mobile, the SpaceX service that links satellites to phones, already holds 2GHz spectrum around the world. Last year SpaceX also agreed to buy spectrum from EchoStar in two deals worth a combined $19.6-billion.
In August, SpaceX president Gwynne Shotwell said the company would build ground infrastructure to make Starlink “a true mobile service”. She said she expected to win “quite a few” customers from the major carriers.
Shares in T-Mobile US, Verizon and AT&T fell about 6% in extended trading after the news. In May, the three carriers agreed in principle to form a joint venture focused on satellites.
“The incumbent wireless carriers have been vocal in expressing scepticism that SpaceX’s network will be able to match the quality of their networks,” analysts at William Blair said. They said SpaceX may offer a bundle of Starlink broadband and Starlink Mobile, possibly with the Grok chatbot included.
FCC chairman Brendan Carr welcomed the deal. “We are going to see more investment, more opportunities for a range of providers,” he said. Grain CEO David Grain said the deal had “the potential to change where and how Americans connect”.
The FCC also approved SpaceX’s plan for its second generation of Starlink Mobile satellites. This allows the company to launch 15 000 satellites built for 2GHz spectrum worldwide. They will fly in very low Earth orbit and offer more bandwidth to normal phones.
Starlink Mobile has already reached Africa. Airtel Africa switched on the service in the Democratic Republic of Congo on 14 August. Airtel called it Africa’s first commercial satellite-to-phone service. At launch, it supported text messages and light apps such as WhatsApp on compatible Android phones.
South Africans are unlikely to get Starlink Mobile soon, according to TechCentral. Starlink is not licensed in South Africa, and SpaceX has never applied to the regulator Icasa. The company objects to a rule that licence holders must be 30% owned by historically disadvantaged groups.
Icasa said in June that it cannot currently issue new network licences to satellite operators. It said the realistic way into the market is to buy an existing licence.
Source: this article is based on reporting by TechCentral. Image: TechCentral. Written with the help of AI and published by the Tzaneen Voice Technology desk. See our Editorial Standards.
Werner Jacobs covers technology for Tzaneen Voice. Werner reports on mobile networks, data prices, internet access, smartphones, apps, AI, cybersecurity and South African tech companies. Each story explains what a new product, price change or policy means for ordinary users in South Africa.