SpaceX Spectrum Purchases Raise Risks for US Telecom Stocks

SpaceX is strengthening its position in the US wireless market through spectrum acquisitions, raising competitive concerns for established telecom operators, according to Morningstar director of communication-services equity research Michael Hodel. In an episode of The Morning Filter podcast on October 19, 2026, Hodel explained how the company's strategy could affect AT&T, Verizon and T-Mobile, while identifying T-Mobile as the most attractive of the three stocks based on its valuation. Morningstar raised its uncertainty ratings for all three wireless carriers from Medium to High following SpaceX's latest spectrum purchase.

Hodel said the firm had not changed its fair value estimates because its base-case assessment still assumes Starlink will not ultimately enter the US wireless business. However, Morningstar now requires a larger margin of safety when evaluating the carriers, reflecting the possibility that SpaceX could become a more credible competitor. Hodel identified T-Mobile as trading at approximately a 35% discount to Morningstar's fair value estimate, a wider discount than either AT&T or Verizon.

Hodel also noted that T-Mobile's stock was offering a dividend yield above 3%, marking the first time in the company's history that its yield had exceeded that level. He added that the company had the financial capacity to repurchase shares.

According to Hodel, Starlink's satellite broadband business differs from its direct-to-cellphone service. Satellite broadband typically delivers internet access through a dish installed at a home or on a recreational vehicle, while direct-to-cell technology connects compatible phones to satellites. Direct-to-cell satellite service has traditionally targeted locations beyond the reach of terrestrial networks, including national parks and remote wilderness areas. Hodel explained that satellite capacity is limited in densely populated locations, while satellite signals can struggle to penetrate buildings.

SpaceX's spectrum acquisitions could help address those limitations by supporting a terrestrial wireless network. Hodel said the company had indicated that it could deploy infrastructure such as towers and rooftop equipment to improve coverage inside buildings and in rural areas. Building a nationwide wireless network independently would require substantial investment, Hodel said. SpaceX would need additional spectrum, billions or tens of billions of dollars for network construction, and further spending to attract customers and provide phone financing.

He suggested that acquiring spectrum and related assets could strengthen Starlink's negotiating position as it seeks a wholesale network-access agreement with an established wireless carrier. Such an arrangement could allow Starlink to supplement its satellite coverage where direct satellite connections are insufficient. Hodel also pointed to a joint venture involving AT&T, Verizon and T-Mobile focused on their relationships with satellite providers.

The arrangement reflects the carriers' shared interest in preventing any one operator from independently granting network access to a satellite company that could later compete directly against them. "We're not going to negotiate independently and provide network access to somebody like Starlink who can then just turn around and compete with us." Hodel described this collective approach as a barrier to independent negotiations between Starlink and any single major carrier.

Although SpaceX could ultimately build its own network, Hodel said the company needs an alternative if negotiations with the major carriers fail. The possibility of independent entry adds uncertainty for established operators, even as Morningstar maintains its current fair value estimates for their shares.