Elon Musk’s space exploration technology company SpaceX has taken a significant step into the wireless communication field dominated by traditional telecommunications companies. On October 8th, SpaceX reached an agreement with another company to purchase a nationwide low-frequency spectrum portfolio. This acquisition signals SpaceX’s foray into the wireless communication domain led by traditional telecom companies.
The transaction involves acquiring the nationwide 800MHz spectrum asset portfolio owned by private equity firm Grain Management. However, this deal is still subject to approval from the Federal Communications Commission (FCC).
SpaceX’s satellite-based mobile service, Starlink Mobile, currently operates on the 2GHz radio spectrum, which falls within the mid-frequency range. Generally, higher-frequency radio bands offer faster transmission speeds but are more susceptible to obstruction by objects.
In contrast, lower-frequency bands can transmit over longer distances and penetrate dense structures like walls and tree cover, addressing previous technical challenges faced by satellite communication networks. By integrating capacities from different frequency bands, Starlink Mobile will not only expand its coverage but also offer more stable connectivity indoors.
SpaceX states that the newly acquired spectrum will facilitate network coverage in areas unreachable by satellite links, including inside buildings. Importantly, most mobile devices currently support this underutilized spectrum. Upon receiving approval from the FCC, the company intends to deploy its expanding satellite constellation, along with advanced ground infrastructure, to connect devices.
The 800MHz spectrum band in the United States is primarily designated for cellular base stations, namely, ground-based mobile phone towers. Currently, wireless communication services in the US are dominated by the three major carriers: Verizon, T-Mobile, and AT&T.
Following the announcement of SpaceX’s acquisition of the low-frequency spectrum portfolio, the stock prices of the three major wireless carriers all dropped by over 6%, while SpaceX’s stock price rose by 3%.
Last year, SpaceX invested approximately $17 billion to acquire satellite spectrum usage rights from EchoStar. Subsequently, EchoStar agreed to sell a portion of its ground cellular network licenses to SpaceX for $2.6 billion. These moves already hinted at SpaceX’s interest in the “ground segment” of the wireless communication business, although these spectrum assets alone were insufficient to establish a mature network.
Now, SpaceX is taking another significant step into the wireless communication sector, moving towards an integrated “satellite and ground” network.