The three biggest US mobile carriers, AT&T Inc. (T), Verizon Communications Inc. (VZ), and T-Mobile US Inc. (TMUS), have spent more than $200 billion on spectrum over the past 20 years to build their 4G/5G networks. After EchoStar Corp. (ECHO) exited the market in 2025, the Big Three are resisting a new Big Fourth.
They have united to prevent market share from going to Space Exploration Technologies Corp. (SPCX), also known as SpaceX, which has escalated its rhetoric around disrupting the terrestrial mobile market. Elon Musk’s satellite company, backed by the record-breaking $86 billion IPO it completed in June 2026, is ramping up pressure on the carriers, presumably to secure a mobile virtual network operator (MVNO) agreement for access to one of the Big Three’s networks.
Disrupting this market would mean that SpaceX is willing to spend $100 billion to build a nationwide network of cell towers and acquire the necessary spectrum, which we see as unlikely—but not unlikely enough, it seems, that it quiets speculation. SpaceX’s recently announced $8 billion spectrum buy is a necessary step toward becoming a carrier, but the Federal Communications Commission (FCC) has given SpaceX a significant ability to pivot its strategy, so we are not convinced that SpaceX will go all-in.
Capstone Managing Director Matt Wiederrecht and Senior Associate Josh Parker have been following the drama. They provide insights for investors.
Q: Where are the investment opportunities and where are the risks?
A: We believe the terrestrial and satellite spectrum will continue to appreciate in value. Available low- and mid-band spectrum is scarce, while data demand will likely continue its upward trend. However, the investment thesis that SpaceX will acquire all of the available US spectrum is unlikely to materialize. We believe that instead of competing nationwide in the low-growth, low-churn terrestrial mobile market, SpaceX is better suited to invest in orbital data centers, AI, and more targeted rural mobile offerings bundled with Starlink Broadband—moves more consistent with plans it described in the run-up to its IPO.
Q: What are second-order effects investors might be missing?
A: At risk are companies with valuations driven by spectrum, such as Anterix Inc. (ATEX), NextNav Inc. (NN), and EchoStar. If SpaceX does not follow through on becoming a major mobile carrier, fewer remaining bidders may translate to lower prices for their licenses.
We feel that the market overreacted when SpaceX’s $8 billion spectrum buy in October sent carrier stocks tumbling while tower and spectrum stocks surged. Although SpaceX’s next-generation direct-to-device (D2D) satellites can operate only in the 1.5—2.5 GHz band, the company now plans to add the 800 MHz band to its satellites alongside radios on towers and rooftops, a sign SpaceX plans a hybrid satellite-and-ground network. While the market prices in a new carrier making its entry, we remain skeptical.
With SpaceX saying in its first earnings call as a public company that it intends to follow a capex-light path to disrupting the wireless business, we believe the company seeks to reassure public markets that capex will stay focused on the highest-return-on-investment opportunities. SpaceX has acquired the spectrum necessary for coverage and indoor service, but it remains far from handling the capacity necessary for a competitive consumer network.
Q: What catalysts or deadlines should stakeholders monitor over the next few months?
A: The FCC’s Upper C-band spectrum auction, expected by July 2027, is the flashpoint to watch. With terrestrial buildout requirements already set and the frequencies likely too high to provide effective service from space, SpaceX spending big in this auction would signal that it plans to build its own tower-based network with strong coverage in urban hubs. We find this scenario unlikely, as SpaceX has been messaging a capex-light mobile offering, at odds with the likely $50 billion or above in total bids that this auction could attract.
Q: What is the realistic timeline for regulatory clarity, and how do different scenarios affect capital deployment?
A: The 2027 Upper C-band auction will inform investors how serious SpaceX is about handling the massive amounts of data that urban and suburban consumers use. We believe SpaceX is trying to put itself in the best position to get an MVNO agreement, which would let Starlink Mobile customers use an incumbent carrier’s already built-out network.
5G spectrum licenses are an appreciating asset, as illustrated by EchoStar’s lucrative exit from the wireless business in 2025. We believe SpaceX will acquire available spectrum when it can use satellite service to satisfy the FCC’s buildout requirements, so we will be watching to see the extent to which the FCC expands buildout flexibility to more bands.
There will be multiple other auctions before Trump’s second term ends that could provide opportunities for SpaceX to add to its spectrum holdings and force the Big Three to defend their moat. We expect SpaceX to participate most on spectrum licenses best suited for satellite service.
Q: Where is there a disconnect between market pricing and policy reality?
A: We believe the market is overconfident that Anterix and NextNav—each a low-band holder in the 900 MHz and Lower 900 MHz bands, respectively—will be acquired in the next few years.
While NextNav faces headwinds even in receiving the FCC spectrum swap it is petitioning for (we are bearish on its chances), each company has emphasized on its earnings calls that SpaceX’s FCC filing urging the expansion of satellite-satisfiable buildout requirements points to the value of their licenses. However, we believe that SpaceX’s aim is to broadly set a norm of buildout flexibility, not front-run a potential acquisition.
As NextNav’s planned network—essentially a terrestrial backup to the Global Positioning System (GPS) that uses 5G towers—needs to be earthbound to work, acquiring NextNav would require SpaceX to build a nationwide tower-based network.
We believe that the slow, county-by-county clearing of the 900 MHz band which Anterix is still working through makes it an unlikely candidate for a takeover until the process is complete.
We believe SpaceX is seeking to make satellite-satisfiable buildout requirements the norm to apply more pressure (via the threat of more SpaceX activity in spectrum auctions) on carriers to grant it an MVNO agreement. We do not interpret SpaceX’s filing as an intent to acquire spectrum belonging to either Anterix or NextNav.
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