Oct 9 (Reuters) - SpaceX has agreed to acquire a nationwide portfolio of licenses in the low-band spectrum in a deal reportedly valued at $8 billion, as it looks to expand beyond satellite internet and become a serious competitor in the US mobile market.
The company first disclosed its plans to enter the mobile services sector during its inaugural earnings call in August. The announcement briefly weighed on shares of the three major US wireless carriers - AT&T, T-Mobile and Verizon - as investors assessed the potential competitive threat.
WHAT IS LOW-BAND SPECTRUM?
Low-band spectrum refers to airwaves that can travel farther and penetrate buildings better than higher frequencies, making them useful for broad-area mobile coverage.
This differs from mid- and high-band spectrum, which can carry more data at a faster speed but cover less area.
SpaceX has agreed to acquire up to 14 megahertz of paired spectrum in the 800 MHz low-band spectrum licenses from Grain Management, with plans to develop a hybrid architecture for Starlink Mobile that combines terrestrial infrastructure with satellite connectivity.
HOW DOES THE US SPECTRUM LICENSING SYSTEM WORK?
Commercial spectrum is a scarce resource in the US, regulated by the Federal Communications Commission, which typically assigns licenses for specific frequencies and geographic areas through auctions or other authorized processes.
License holders must comply with technical rules and deployment requirements, but before that comes the transfer of licenses, which generally requires regulatory approval.
The latest SpaceX deal for spectrum licenses is awaiting FCC approval.
WHAT SPECTRUM DO THE THREE MAJOR CARRIERS HOLD?
AT&T's low-band portfolio includes 700 MHz and 850 MHz spectrum, as well as 600 MHz licenses acquired through its July EchoStar deal.
Verizon holds spectrum in the 700 MHz and 850 MHz bands, while T-Mobile's low-band holdings include 600 MHz and 700 MHz spectrum.
WHAT IS THE PLAN FOR STARLINK MOBILE?
The company plans to integrate the spectrum into its next-generation satellite system, while also deploying ground-based radios and antennas on towers and rooftops.
The FCC approved Starlink Mobile's Gen2 constellation application this week, authorizing SpaceX to launch 15,000 satellites optimized for 2 GHz spectrum worldwide.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shinjini Ganguli)
