On Thursday, SpaceX (SPCX) reached an agreement to acquire a set of nationwide low-band spectrum resources, a move that pushes Elon Musk's satellite-to-device business one step closer to directly challenging traditional wireless giants across the United States.

SpaceX's Starlink Mobile satellite-to-cellular service previously held 2 GHz mid-band spectrum used to deliver high-bandwidth capacity. The newly acquired spectrum will enable signals to penetrate obstacles. Financial terms of the deal were not disclosed, and the counterparty is private equity firm Grain Management.

Low-band signals can travel long distances and pass through dense obstructions such as walls and tree cover, solving a major technical challenge that satellite mobile networks had previously faced. By combining nationwide low-band spectrum resources with high-band space capacity, SpaceX aims to let Starlink Mobile completely bypass traditional cellular base stations, mounting a challenge to the wireless industry's oligopoly in terms of wide-area coverage and indoor signal reliability.

The deal intensifies competitive pressure on traditional carriers, turning "satellite-to-device" technology from an auxiliary safety feature for remote dead zones into a full-fledged commercial rival capable of shaking up terrestrial cellular networks. Shares of T-Mobile US, Verizon and AT&T all fell about 6% in after-hours trading. The three carriers formed a satellite-focused joint venture in May, a move some analysts viewed as aimed at countering the threat from SpaceX.

Analysts at William Blair said: "Incumbent wireless carriers have publicly expressed skepticism that SpaceX's network will not match the quality of their own networks." "We expect SpaceX to launch highly attractive bundled packages of Starlink broadband and Starlink Mobile. The company may also include Grok in that bundle," referring to the AI chatbot developed by Musk's xAI.

The transaction involves the acquisition of Grain Management's nationwide 800 MHz spectrum asset portfolio, a 100% stake, and still requires approval from the Federal Communications Commission (FCC). Grain purchased these spectrum resources from T-Mobile earlier this year.

Commenting on the deal between SpaceX and Grain, FCC Chairman Brendan Carr said: "We will see more investment and more opportunities for all kinds of service providers, and see the United States lead the world in next-generation technology — which will benefit consumers across the country."

Grain CEO David Grain said the deal "has the potential to change how and where Americans connect." Most mobile devices currently support the 800 MHz band, meaning consumers will not need to buy dedicated satellite phones.

Verizon spokesperson Rich Young noted that even if SpaceX acquires the spectrum, it still faces many obstacles. "Even with a massive amount of spectrum, if the company lacks the network to use it, it's useless; it's just vacant radio waves," he said.

This week, the FCC also approved Starlink Mobile's second-generation (Gen2) satellite constellation application, authorizing SpaceX to launch 15,000 satellites optimized for the 2 GHz band. This new satellite constellation will operate in very low Earth orbit, providing greater bandwidth and low-latency connectivity for standard mobile phones.