SpaceX in talks for 80,000 US cell sites, setting up a fourth national phone carrier

SpaceX wants to become your phone company, and it is apparently willing to rent a huge slice of America's cell towers to do it. According to a Bloomberg report published October 22 and picked up by Reuters, SpaceX is negotiating with US tower owners for access to at least 80,000 SpaceX cell sites, enough to support a ground based mobile network that would sit alongside Starlink's satellites. The news hit wireless stocks hard on Friday and pushed tower stocks sharply higher, and it raises a real question for anyone paying a monthly phone bill: is a fourth national carrier finally coming?

What happened

Bloomberg reported that SpaceX is in talks with the largest tower companies in the country, including Crown Castle and American Tower, to lease space on tens of thousands of sites. RCR Wireless News, citing the same reporting, said people familiar with the talks described 80,000 as a minimum rather than a ceiling.

That number is big. Reuters put it at roughly half of the 158,500 purpose built cell towers operating in the US last year. Crown Castle and American Tower each own about 40,000 US sites, and Vertical Bridge holds around 20,000, according to RCR. In other words, SpaceX would need a large share of what the big landlords own.

American Tower declined to comment to Bloomberg. Crown Castle did not confirm the talks, but on its earnings call earlier in the week, when an analyst asked whether it was speaking with SpaceX, Amazon or other satellite players, the company answered: "Assume we're talking to all parties."

The report lands just weeks after SpaceX said it had agreed to buy about $8 billion of low frequency wireless spectrum, a deal The Motley Fool dated to October 9. Bernstein analyst Laurent Yoon, quoted by Yahoo Finance, put SpaceX's total spectrum commitment at roughly $30 billion.

Why SpaceX cell sites matter for the wireless market

Starlink already sells satellite broadband and has a direct to cell service that lets ordinary phones send texts from space. Satellites, though, cannot carry dense city traffic the way ground towers can. Owning spectrum is only half the job. You also need radios on towers near where people live and work.

That is why analysts are treating the tower talks as a turning point. "Committing ~$30 billion into spectrum is serious enough. Committing to 80K macro sites could be a point of no return," Yoon wrote, according to Yahoo Finance. He added that 80,000 sites is "broadly consistent with the scale required for a nationwide terrestrial wireless network."

RCR noted that on SpaceX's quarterly call earlier in October, the company talked about a "clear path" to "several hundred billion dollars" in telecom revenue. Renting this many towers would be the first concrete step toward a full network built around Starlink Mobile.

It also fits a pattern. SpaceX has been spending heavily since going public. TheStreet reported that the company posted $4.4 billion in third quarter profit but guided fourth quarter capital spending to between $35 billion and $40 billion, up from $19.6 billion in the third quarter. If you have followed the company's other moves, such as Elon Musk's pledge to give a SpaceX share to every kid in America or the talk of a SpaceX and Tesla merger, the ambition here will not be surprising.

How Wall Street reacted

Tower owners rallied and carriers sold off on Friday, October 23.

Tower companies

TheStreet reported that Crown Castle surged 11.65% and SBA Communications rose 7.78%. The Motley Fool, writing at midday, had Crown Castle up about 9% and American Tower up about 4%. The exact figures depend on when they were taken, but the direction was clear. Investors see SpaceX as a large new tenant for companies that have struggled with slower carrier spending.

The big three carriers

The Motley Fool reported that AT&T and T-Mobile each fell close to 8% by midday, while Verizon slipped about 1%. Yahoo Finance said the three carriers traded sharply lower before the market opened.

The selloff came on a rough day for tech overall. TheStreet said the Dow closed down about 1.2% as worries grew that AI infrastructure spending may be peaking, a theme that has also weighed on names like CoreWeave.

How much would a SpaceX phone network cost?

Building a national wireless network is expensive, and estimates vary widely. RCR collected several:

• TD Cowen estimated a nationwide ground network could cost more than $80 billion.
• BNP Paribas earlier put the cost at about $100 billion, based on 50,000 to 70,000 sites, and said the site count could rise to 120,000 if SpaceX also wins upper C band spectrum at next April's auction.
• Bernstein gave a range of $50 billion to $130 billion for a competitive US network.

RCR columnist Vish Nandlall ran a rough payback calculation. Recovering $50 billion from 20 million customers over 10 years would require about $21 a month in average revenue per user. "That's a difficult starting point for a low-price competitor," he wrote.

He also argued SpaceX does not need to win many customers to hurt the incumbents. By his math, for every 100 million subscribers, a $1 cut in the monthly bill removes $1.2 billion a year from the market. "SpaceX doesn't have to take many customers to damage the incumbents' economics," Nandlall wrote.

Who is affected

Phone customers

Nothing changes for your phone plan today. The Motley Fool noted that commercial service is not expected until late 2027, and SpaceX has not announced prices, plans or a launch date for a standalone mobile service. Over time, though, a fourth national carrier with deep pockets could add price pressure, especially in areas where choices are limited.

Carriers and their investors

AT&T, Verizon and T-Mobile have spent years and many billions on 5G. A new rival that already has satellite coverage and billions of dollars in spectrum deals behind it is a threat they have to take seriously. Yoon said the competitive impact may be years away, but that ongoing spectrum and infrastructure moves are likely to keep weighing on how investors feel about the sector.

Tower landlords

For Crown Castle, American Tower and Vertical Bridge, a new large tenant could mean years of rent. The deals are not signed, though, and the final number of sites and terms are unknown.

What to watch next

A few things will show whether this becomes real:

1. Signed leases. Watch for Crown Castle or American Tower to confirm an agreement, or for SpaceX to mention one in filings.
2. Spectrum moves. The upper C band auction next April could signal how large SpaceX wants its network to be.
3. Regulators. A new national carrier will need approvals and will draw attention in Washington, much like the fights over TP-Link routers at the FCC.
4. Pricing. Any hint of a Starlink Mobile plan price will tell carriers how aggressive SpaceX plans to be.

You can follow more stories like this on our tech news page.

Frequently asked questions

Is SpaceX buying 80,000 cell towers?

Not exactly. According to Bloomberg, SpaceX is in talks to lease or secure access to at least 80,000 cell sites owned by companies such as Crown Castle and American Tower. No deal has been announced.

When could a SpaceX mobile network launch?

The Motley Fool reported that commercial service is not expected until late 2027. SpaceX has not given an official launch date.

Will my phone bill go down?

Not right away. Analysts say a fourth carrier could pressure prices over time, but that depends on how many customers SpaceX wins and what it charges.

Why did AT&T and T-Mobile stock fall?

Investors worry that a well funded new competitor using SpaceX cell sites and its own spectrum could take customers and force price cuts, which would squeeze carrier profits.