New industry for SpaceX? Musk hasn’t failed to break into one yet.
October 24, 2026 · Michael Lawton
Summary. Musk and SpaceX are looking to break into the telecom industry, leveraging its immense capex ability and access to satellite tech. Such a move is putting pressure on competitors, though will it be enough to truly compete with infrastructure that has been building for decades? Musk has rarely failed to break into new industries and with the access to tech and capital, we think that this may not be a failure for him and SpaceX.
What happened
- $14.6B in revenue, up 161%, and $4.4B in net income, compared with a $1.1B loss a year ago, Oct 20.
- SpaceX expects capital expenditures of $35B to $40B in the fourth quarter, up from $19.6B in the third.
- SpaceX also just had its first profitable quarter as a public company. However, earnings aren’t all that may drive investor sentiment, as its stock sharply fell shortly after the release.
- Plunged over 9%, closing at $144.75, Oct 22.
- An $8 billion deal for 800 MHz wireless spectrum from Grain Management, Oct 8. It still needs FCC approval.
- Major US telecom companies saw their stocks drop 5% to 7% after the spectrum deal and plans for “Starlink Mobile,” Oct 8.
Why it happened
With Starlink starting to drive real profits, as well as revenue from its AI business, SpaceX reported its first profitable quarter as a public company and isn’t looking back. Musk and SpaceX are looking to break into the telecom industry with Starlink Mobile. The buildout will require billions in capex and seemingly unlimited access to the satellites that they already control. However, SpaceX recently agreed to buy spectrum, helping to build out its infrastructure in the industry. Given the release of this new idea, big name telecom companies like Verizon and AT&T saw their stocks drop. It will be difficult to know what the future holds for SpaceX, however Musk has access to the resources and a seemingly unlimited capex and balance sheet.
How it flows through
Given the capex needed for such a large buildout, it will take this division of SpaceX a long time to become FCF positive. However, Musk and Starlink loyalists could switch over to this internet given the positive reputation already surrounding Starlink. Sentiment alone won’t be enough for customers to switch over. They will have to somehow keep prices low compared to peers and provide customer incentive. I doubt people will be eager to switch from the big name companies like T-Mobile or Verizon, especially given their phone deals with Apple and Samsung.
Winners and losers
| Industry | Winner or loser | Why | Example companies |
|---|---|---|---|
| Tower companies | ▲ Winner | Lease agreements with SpaceX would prove fruitful for their stock and profits. | Crown Castle (CCI, NYSE), American Tower (AMT, NYSE) |
| Telecommunication | ▼ Loser | These companies have nothing to gain and everything to lose from Starlink’s potential telecom buildout. Can seemingly unlimited capital and resources be enough for Musk to compete against decades of infrastructure and earnings history? | AT&T (T, NYSE), Verizon (VZ, NYSE), T-Mobile (TMUS, Nasdaq) |
Names to watch
Tesla TSLA
◆ Potential merger
A potential merger between the two companies could prove to be helpful in combining tech and AI resources. If they are able to create a synergy with seamless Starlink and phone use, providing wifi to cars, this could be huge for the general population in incentivizing them.
Crown Castle and American Tower CCI · AMT
▲ Potential lease deals
These two companies are on watch for leasing deals from SpaceX, in a big plan to combine Starlink’s satellites and towers on the ground to create a nationwide network of internet. The possibility of leasing deals has already seen their stocks rise, and I bet the lack of pure purchase and operation from SpaceX will help them to test the market while keeping costs relatively low.
What would prove us wrong
- If investors continue to question SpaceX profitability, a lack of seemingly unlimited capital may not allow a full telecommunication buildout.
- If SpaceX leans toward a more satellite focused approach, rather than leasing towers on the ground.
- If Musk is able to develop a larger network on “on the ground” infrastructure, rather than a more satellite approach, we could see a real test on the market and it will be interesting to watch.
- If the FCC blocks or delays the $8 billion spectrum deal, which is expected to close in the first half of 2027.
- If Starlink Mobile misses its planned launch at the end of 2027.
No call yet. If there is one to make, it would just be for more stress to be put on current telecom giants and buckle down on operations.
Sources
- SpaceX: Third quarter 2026 results
- Finviz: SpaceX guides Q4 capex to $35B–$40B
- GuruFocus: SpaceX shares drop 9% despite Q3 beat
- TIKR: SpaceX spectrum deal sends telecom stocks tumbling
- TIKR: Crown Castle soars 13% on SpaceX’s $8 billion spectrum buy
- Ground News: SpaceX and Tesla form committees to discuss a potential merger
- Reuters: SpaceX’s spectrum deal still leaves it far from rivaling telecom giants
- Yahoo Finance: SpaceX’s telecom ambitions will be hard won
- Yahoo Finance: Crown Castle and American Tower stocks
- Wall Street Oasis: SpaceX delivers, tech takes off
- Wall Street Oasis: Tech takes a hit
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