Carriers Shrug Off Starlink
Dan Abdinoor@abdinoor
+0.8%
since Oct 14
The idea
I think the spectrum deal SpaceX made is a negotiating chip to land a good wholesale deal with an existing carrier, not a sign it's building its own rival network, so the sharp selloff in carrier stocks looks overdone to me. I hold the three big US carriers equally at 25% each, and I added SpaceX at 25% as a hedge in case it does go head to head with carriers for customers. I'm watching the FCC's review of the spectrum sale, any wholesale deal announcement, and the carriers' own satellite venture that left SpaceX out, since any of those could change my view.
What it owns
- These three stocks fell sharply on SpaceX spectrum news, but the take expects them to recover if SpaceX pursues a wholesale partnership rather than building a rival network. · AT&T Inc.It collects revenue from wireless pricing power and could serve as the wholesale host carrier for satellite mobile traffic, giving it exposure to both traditional and emerging business models., T-Mobile US, Inc.It suffered the steepest decline among carriers on the SpaceX news and previously partnered with Starlink, so it stands to recover most if SpaceX opts for an MVNO arrangement instead of network competition., Verizon Communications Inc.It dropped its worst amount since the early two thousands on the spectrum announcement, but the take sees this as an overreaction if SpaceX pursues wholesale talks with carriers rather than launching a rival mobile network.75%
- This position gains if Starlink Mobile competes directly with carriers, offsetting losses in the carrier bet if that scenario unfolds instead. · Space Exploration Technologies Corp. (SpaceX)It operates satellite internet and mobile services, so a direct-to-consumer strategy for mobile would increase revenue concentration in high-margin offerings.25%