US and European telecom stocks tumbled on Friday (October 9) after SpaceX’s acquisition of low-band spectrum heightened concerns over growing competition from satellite-based mobile services.
\n\nT-Mobile US, Verizon and AT&T fell between 5% and 6% in premarket trading, while the STOXX Europe 600 Telecommunications index dropped 3.3% to its lowest level since February.
\n\nDeutsche Telekom, Europe’s largest telecom operator by market value, fell 8%, while Britain’s Vodafone dropped 4.5%, France’s Orange lost 3.4%, and Spain’s Telefonica slipped 3.3%.
\n\nThe slide came after reports that SpaceX had agreed to acquire private-equity firm Grain Management’s nationwide 800 MHz spectrum portfolio in a deal valued at about $8 billion, bolstering the company’s ambitions in satellite-to-cellular connectivity.
\n\n”We believe the Grain transaction is a clear sign that SpaceX is going to be a more aggressive acquirer of spectrum,” Morgan Stanley analysts said in a note, adding that any threat to established carriers is likely to materialise gradually, starting in rural markets.
\n\nLow-band spectrum can travel longer distances and penetrate buildings and other obstacles more effectively than higher-frequency airwaves, enabling SpaceX’s Starlink Mobile push.
\n\nWhile the companies did not share financial terms of the deal, the Wall Street Journal reported, citing sources, that it is…
Original source: https://www.cnbctv18.com/technology/
