SpaceX Agrees to Buy a Nationwide Block of 800 MHz Spectrum, Reportedly for $8 Billion, to Back Starlink Mobile

SpaceX has agreed to buy airwaves that would help its Starlink Mobile service reach phones indoors and in areas with limited coverage. On Thursday 8 October the company agreed to acquire private-equity firm Grain Management's nationwide 800 MHz spectrum, up to 14 MHz of paired spectrum, subject to approval from the Federal Communications Commission, according to RCR Wireless News.

Neither side disclosed a price. The Wall Street Journal, citing people familiar with the matter, reported about $8 billion in cash, a figure Reuters carried.

Why does 800 MHz matter for a satellite service?

Low-band signals travel long distances and penetrate walls and tree cover, Reuters notes. SpaceX's Starlink Mobile already holds global 2 GHz mid-band spectrum, and RCR says the new licences are meant to complement it and help connect devices indoors and in areas with limited terrestrial coverage. Elon Musk said the purchase will deliver "complete phone coverage in America", and called it an earthquake for those who understand the spectrum wars.

The licences have a short history. Grain bought them from T-Mobile in August in exchange for cash and Grain's own 600 MHz holdings, RCR reports. This week the FCC also approved SpaceX's request to deploy a constellation of 15,000 direct-to-device satellites, and waived standard leasing requirements for certain spectrum SpaceX bought from EchoStar.

What do the carriers and analysts say?

The incumbents are unimpressed. A Verizon spokesman, Rich Young, said a company can hold plenty of spectrum, but it does not matter if it lacks the network to use it. Analyst Vish Nandlall made a related point to RCR, that spectrum delivers coverage rather than much capacity. Bernstein Research estimates a competitive nationwide network would cost between $50 billion and $130 billion to build, and BNP Paribas puts a US build at about $100 billion. By Nandlall's arithmetic, recovering $50 billion over ten years from 20 million subscribers would take about $21 per subscriber each month before operating costs, a hard starting point for a low-price challenger.