Market fears grow over satellite competition disrupting traditional mobile coverage as SpaceX secures low-band airwaves.
Telecommunications shares in Australia and New Zealand experienced significant losses on Monday following news of SpaceX’s acquisition of a nationwide spectrum portfolio in the United States. The transaction has heightened investor concerns that satellite-delivered mobile services could directly challenge the network coverage advantage traditionally held by legacy telecoms operators.
In Australia, the country’s largest provider, Telstra, fell 2.5 per cent to close at a six-week low, while TPG Telecom dropped nearly 5 per cent, marking its steepest single-day decline since early June. Challengers Superloop and Aussie Broadband also slid, dropping 2.4 per cent and nearly 2 per cent respectively. Across the Tasman, Spark New Zealand slipped 1.8 per cent.
The market reaction follows SpaceX’s agreement to buy low-band spectrum in the US, positioning Elon Musk’s satellite venture to compete more directly with terrestrial wireless giants. Low-band airwaves travel over longer distances and penetrate structures more effectively than higher-frequency spectrums, making them suited for widespread coverage. The news previously triggered sell-offs across US and European telecom markets.
David Tuckwell, Chief Investment Officer at ETF Shares in Sydney, noted that investors fear the US deal is merely a prelude to global expansion, threatening the competitive advantage legacy operators derive from extensive network coverage. Tuckwell highlighted Telstra as particularly exposed due to its coverage reliance, though he suggested the immediate threat lies in regional pricing power rather than subscriber losses.
Conversely, Citi analysts maintained a “buy” rating on Telstra, noting that while SpaceX’s acquisition presents a short-term headwind for the share price, it underscores the ongoing necessity of terrestrial spectrum. Citi also pointed to potential upside regarding the operator’s 2027 financial earnings guidance.
