US, European telecom stocks slide as SpaceX spectrum deal rattles sector
XLC•U.S. and European telecom stocks fell after SpaceX agreed to acquire low-band spectrum, with T-Mobile down 9.1%, AT&T 7.4% and Verizon 5.9%. The deal was reportedly valued at about $8 billion.
1. Telecom stocks fall
U.S. and European telecom stocks declined after SpaceX's spectrum acquisition heightened concerns about competition from satellite-based mobile services. T-Mobile fell 9.1%, AT&T dropped 7.4% and Verizon lost 5.9%; all three were the largest percentage decliners on the S&P 500 in early trading.
2. European shares retreat
Deutsche Telekom fell 7.1%, Orange lost 1.8% and Telefonica slipped 3.3%. The STOXX 600 Telecommunications index dropped more than 2.4% to its lowest level since January 30.
3. Deal and tower operators
SpaceX aims to use the low-band spectrum to help Starlink Mobile bypass conventional cell towers where possible and compete with wireless carriers on coverage and indoor service. The companies did not disclose the deal's financial terms; it was reportedly valued at about $8 billion. American Tower, Crown Castle and SBA Communications rose between 7.6% and 12.6%, as investors bet the ambitions could increase demand for terrestrial infrastructure.
