SpaceX Reportedly Eyes 80,000 US Cell Sites for a Fourth Wireless Network

Keypoints:

• Bloomberg reported that SpaceX is in talks to access at least 80,000 US cell sites
• The goal is a fourth nationwide wireless network
• Verizon, AT&T and T-Mobile shares each fell about 5%
• Crown Castle shares jumped as much as 10% in late trading
• Verizon reported third-quarter earnings on Monday, 26 October

Bloomberg reported that SpaceX is in talks to access at least 80,000 US cell sites. The aim would be a fourth nationwide wireless network. Shares of Verizon, AT&T and T-Mobile each fell about 5% on the news. Crown Castle, which owns towers, rose as much as 10% in late trading. The report arrived just before Verizon's third-quarter results.

The reaction shows how investors read it. The three big carriers share about 90% of US retail postpaid phone customers, according to Morningstar. A new national competitor would challenge that structure. Tower owners, in contrast, rent space to carriers, so a new tenant could raise demand for their sites. The talks are not confirmed, and no deal terms have been reported.

Verizon is the first carrier to face investors. It reports before the market opens on 26 October. The company has been in a turnaround. It raised full-year guidance for a second quarter in a row. It now expects adjusted earnings per share growth of 6% to 7% and free cash flow growth of 9% to 10%. Total postpaid phone net additions are expected in the upper half of a range of 750,000 to 1 million.

Recent results give the baseline. Verizon added 184,000 postpaid phone customers in the second quarter. That was its best second quarter in five years. Consumer postpaid phone churn, the share of customers leaving, was 84 basis points. Verizon has cut prices to improve retention and offset the cost with less generous phone upgrade offers.

Analysts will watch churn, net additions and service revenue growth near 3%. Morningstar's preview noted that Verizon shares were up about 10% for the year before the SpaceX report. The stock had already lost about 7% since mid-September.