Bernstein Downgrades AT&T on SpaceX Foray Into Wireless
Bernstein cut AT&T to market perform as analysts warned SpaceX’s wireless expansion could weaken incumbents’ pricing power and draw more customers.
- On Tuesday, telecom stocks recovered after a recent sell-off sparked by SpaceX's push to become a "major mobile carrier," triggering market volatility for AT&T, Verizon, and T-Mobile.
- The Federal Communications Commission recently authorized SpaceX to deploy 15,000 satellites for "direct to device" connectivity while the company plans to build cell towers using spectrum acquired from Grain Management.
- Deutsche Telekom CEO Timotheus Höttges questioned SpaceX's ability to handle traffic in densely populated cities, noting Elon Musk's models are "extremely intelligent" but massive hurdles remain. He suggested satellites might struggle with indoor coverage versus traditional carriers.
- Analyst Laurent Yoon downgraded AT&T on Monday, citing "justifiable" pressure from SpaceX's wireless foray. Yoon warned the entry will likely spark a "prolonged investor debate around Starlink's impact and the likelihood of Starlink's pricing action."
- SpaceX may initially focus on rural and suburban areas, potentially partnering with cable companies to enhance coverage. Kutgun Maral at Evercore ISI noted that "cable is both competitor and the most natural capacity partner" for SpaceX's wireless ambitions.
12 Articles
12 Articles
T-Mobile's Parent Company Fires Back at SpaceX's Starlink Mobile Challenge
Deutsche Telekom's CEO warns other mobile carriers against forming a Mobile Virtual Network Operator (MVNO) partnership with SpaceX. T-Mobile's parent company, Deutsche Telekom, is taking some shots at SpaceX’s push to become a major US mobile carrier, casting doubt on Starlink Mobile becoming a competitive threat. “Why should I have to make calls over a satellite network when I can already get good coverage, or the best coverage, …
Elon Musk wants to join mobile communications with Starlink. Telekom CEO Höttges remains calm, but the stock exchange fears an attack on the business model.
SpaceX is becoming its rival by the mobile operator's partner. Telekom's share has been clearly in decline since Friday. An application to the US FCC shows what Musk is planning to do with Starlink.
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