✦ Oct 23: Tower Stocks Up, Carrier Stocks Down
Closing prices, change from the previous day
On October 23, shares of cell tower operator Crown Castle rose 9.06% on the US market, and American Tower rose 4.08%. AT&T, on the other hand, fell 7.96% and T-Mobile fell 7.71%.
The stocks of the telecom service companies and the companies that rent out telecom infrastructure moved in opposite directions.
The cause was an October 22 report that SpaceX is negotiating with major infrastructure companies to use at least 80,000 'cell sites' across the United States. Crown Castle was named as one of the companies in the talks.
SpaceX hasn't officially announced that it has secured 80,000 cell sites, and it hasn't signed any lease. But the market reacted anyway, swelling with hope that a big new customer is showing up in the cell tower business.
For reference, a cell site is a place where mobile communications equipment is installed. Simply put, it's a base station facility with antennas and radio equipment so that phones can connect to a carrier's network.
Why Does a Satellite Company Need Ground Base Stations?
✦ Satellites and Ground Networks: Who Does What
Complements, not replacements
Starlink's strength was that satellites could connect places ground base stations can barely reach. But what SpaceX is going for this time goes beyond satellite internet. It wants to serve customers directly, like an existing mobile carrier.
Satellite connections and ground networks don't necessarily replace each other. Satellites cover wide areas, while ground base stations handle city call traffic, data demand and indoor connections.
By splitting the roles, they can cover each other's weak spots.
That's exactly the approach SpaceX is pushing.
✦ From Spectrum to Service
What it takes to turn a license into coverage
The important asset here is spectrum. On October 8, SpaceX agreed to acquire the 800 MHz band spectrum license portfolio of Grain Management, a communications infrastructure investment firm.
(Closing conditions such as U.S. Federal Communications Commission (FCC) approval remain.)
Reports put the deal at about $8 billion. But getting the right to use spectrum doesn't automatically create places to send signals from. Region by region, you have to pick locations that cover users, install equipment, then connect power and communications.
If spectrum is the pathway for communication, a cell site is the base that turns that pathway into actual service.
Tower Companies Rent Facilities to Carriers
✦ How Tower Companies Make Money
Facilities for rent, not phone plans
Crown Castle and American Tower aren't companies that sell mobile phone plans. They operate cell towers and the land where telecom equipment can be installed, and they lease that space to mobile carriers for rent.
Antennas and equipment from several companies can fit on a single tower. So when a tenant is added to an existing site, there's room to grow revenue without building a new tower.
According to Crown Castle, the average was about 2.4 tenants per tower at the end of 2025. Telecom is a market with fairly high barriers to entry, so landing new customers is tough, right? That puts a cap on how fast revenue can grow.
But what if a big company like SpaceX walks into towers that are already built as a customer? Tower companies would be thrilled.
✦ How Big Is 80,000?
Cell sites are not all towers
So if the 80,000 cell sites SpaceX is targeting turn into actual leases, that's a lot of new demand for tower companies. The United States had about 158,500 purpose-built towers last year. 80,000 is nearly half that number. That's a huge scale.
However, 'cell sites' can also include places like building rooftops, so not all 80,000 are towers. And SpaceX wouldn't rent all of them from Crown Castle either. Even so, it's exciting news for the tower industry anyway.
One Side Saw a Rival, the Other Saw a Customer
To shareholders of existing carriers, SpaceX is a potential competitor. If a new player takes subscribers, incumbents have to fight back with pricing or service perks, and network investment and marketing costs go up too.
✦ Tower Operators vs. Carriers: Stock Moves (Oct 12 = 100)
Oct 12 - Oct 23, relative index, regular-session daily closes
So on October 23, AT&T and T-Mobile fell 7.96% and 7.71%, respectively, at the close. Considering that carrier stocks normally move more steadily than other sectors, that's a pretty big drop.
Tower companies, on the other hand, went up. Their earnings hadn't been great, and then good news landed. For example, Crown Castle's Q3 2026 site rental revenue was $966 million, down 4.5% from a year earlier.
Hope Still Has to Turn Into Earnings
Crown Castle's chief executive was asked on the earnings call whether the company is in lease talks with satellite operators like SpaceX or Amazon. The gist of the answer was only that you can assume the company is talking to all parties.
It's not yet a stage where they can be specific.
There are also doubts about whether SpaceX's plan can really move forward. TD Cowen estimated that building a nationwide ground mobile network could cost more than $80 billion.
On top of that, regulatory approval of the spectrum deal, base station installation and network build-out all have to actually happen.
✦ Three Things Investors Will Watch
How to tell if talks are turning into earnings
For now, the first thing tower company investors will watch is whether the talks turn into an actual long-term lease.
On top of that, they'll need to check whether the rent tower companies earn from a SpaceX deal leaves enough profit even after extra spending such as equipment upgrades.
Until the exact contract size, terms and rollout schedule are public, you can't calculate long-term earnings from the number 80,000 alone.
This isn't investment advice. You know that, right? Let's each protect our own hard-earned money.
That's all for this post. See you next time.
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🌐 Korean version: 스페이스X의 이동통신 진출설에 통신탑 회사들의 주가 급등! 근데 위성 회사가 통신탑이 왜 필요해?
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