Topline
T-Mobile would be the most logical acquisition target for SpaceX should it fail to strike a deal to use another company’s wireless network, one analyst suggested Thursday, as Elon Musk’s rocket maker seeks to expand Starlink into a broader wireless business.
Key Facts
SpaceX outlined its hopes to expand into wireless in its initial public offering filing last month, casting its Starlink Mobile as a potential competitor to Verizon, AT&T and other providers.
TD Cowen analyst Gregory Williams wrote Thursday that T-Mobile would be the “clear choice” for SpaceX if it does not reach a wholesale network deal, or if Musk’s firm would rather own a wireless business outright, citing SpaceX’s existing partnership with T-Mobile through its Starlink business.
“Another thought would be [for SpaceX] to acquire AT&T,” Williams suggested.
SpaceX could raise the money to buy T-Mobile by selling more of its own stock, which Williams said it could do without significantly reducing existing shareholders’ ownership stakes.
Williams suggested SpaceX may also acquire a cable TV company, noting both Comcast and Charter Communications reached wholesale network agreements with Verizon, making them potentially attractive to SpaceX.
surprising fact
Starlink accounted for 69% of SpaceX’s revenue through its first quarter, and the company’s connectivity arm—which includes Starlink Mobile—was its only profitable unit after its space unit lost $619 million and its AI arm shed $2.5 billion.
tangent
Some analysts have projected that SpaceX will soon acquire Musk’s Tesla: Wedbush Securities analyst Dan Ives said his firm placed odds of 80% or higher for the two companies to merge by 2027, writing in a note the “groundwork [was] already in place for both operations to become one operation.” SpaceX president Gwynne Shotwell, who spoke to CNBC ahead of the firm’s trading debut earlier this month, said a deal combining SpaceX and Tesla “might make Elon’s life a little easier.” Shotwell said there’s “no question that there are synergies between Tesla and SpaceX in our futures,” but concluded she was “focused on keeping the lights on here.”
key background
In its IPO filing, SpaceX projected the addressable market for Starlink Mobile, or the total amount of revenue it could make if it held all possible demand for the products or services it targets, at $740 billion, briefly noting it would seek to “expand our Starlink Mobile offering.” In January, in response to a user on X speculating whether a “Starlink phone” would be released, Musk said it was “not out of the question at some point” (Musk said SpaceX was not developing a phone as of February).
