American billionaire Elon Musk’s SpaceX has cleared an early regulatory step in its roughly $8 billion purchase of wireless airwaves from Grain Management LLC, a deal meant to turn its Starlink service into a full U.S. mobile carrier.
The Federal Communications Commission has accepted for filing SpaceX’s application to acquire 546 licenses in the 800 MHz band from Grain, covering nearly all U.S. residents. Acceptance opens the deal to public comment and formal review by the agency, which must approve the transfer before it can close.
SpaceX agreed in October to buy Grain’s 800 MHz portfolio, which includes 14 MHz of paired low-band spectrum across the country. The company is paying cash. Low-band airwaves travel long distances and penetrate buildings well, which makes them valuable for both cell towers and satellite-to-phone service.
“This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America,” Musk wrote on X when the deal was announced. SpaceX said the purchase “will pave the way for Starlink to become a major mobile carrier in the U.S.”
Shares of AT&T Inc., T-Mobile US Inc. and Verizon Communications Inc. each fell about 6% in extended trading after the announcement.
A quick profit for Grain
Grain, a private equity firm that invests in spectrum and communications infrastructure, bought 800 MHz licenses covering nearly the whole country from T-Mobile for $2.9 billion in cash. The FCC approved that sale on July 1, setting buildout requirements and a deadline for Grain to pick a satellite partner for direct-to-device service. The California Public Employees’ Retirement System, an investor in Grain’s funds, expects to roughly double its money on the SpaceX sale.
Some water and energy utilities have said the SpaceX deal caught them off guard, and the review gives them a chance to raise concerns.
SpaceX is building Starlink Mobile to serve customers from both the ground and space. It has chosen Qualcomm Inc. to supply hardware and software for tens of thousands of 5G cell sites, with deployment starting in 2027.
Musk, 55, is the world’s richest person, with most of his fortune tied to his stakes in SpaceX and Tesla Inc. SpaceX went public in June in the largest initial public offering on record. Starlink already offers satellite texting and data to phones through partners including T-Mobile.