T-Mobile says MVNO agreements must bring new customers, distribution channels, or capabilities.
Gopalan called satellite broadband inferior to fixed wireless outside some deep-rural areas, citing limited benefits.
SpaceX is pursuing spectrum and reportedly seeking access to at least 80,000 U.S. cell sites for its hybrid network.
Shares of Space Exploration Technologies Corp. (SPCX) slipped 1% overnight heading into Wednesday as T-Mobile CEO Srini Gopalan doubled down on his rejection of a mobile virtual network operator (MVNO) arrangement with SpaceX, saying he sees “no room” for a deal in either consumer wireless or physical and edge AI.
SPCX stock fell over 2% on Wednesday to $145.23, bringing its weekly losses to nearly 2%.
“But the answer to the MVNO is I see no room for an MVNO with SpaceX, either on the consumer side or on the physical and Edge AI side,” Gopalan said on T-Mobile’s third-quarter (Q3) earnings call.
An MVNO sells wireless service using wholesale access to another carrier’s network. Such a deal could support a SpaceX-branded mobile offering, while the company develops its own terrestrial infrastructure.
Gopalan said T-Mobile’s criteria remain unchanged: additional customers, new distribution channels or capabilities. “The way we think about it is, does an MVNO give us access to incremental TAM? Does it give us access to new distribution channels? Does it give us incremental capability of any sort?” he said.
When asked whether an edge-computing partnership could offer an alternative to SpaceX building its own network, Gopalan pointed to T-Mobile’s standalone 5G investments and preparations for 6G. “We see ourselves in the lead in terms of those capabilities, and we see no space for an MVNO here because what additional capabilities does it give us? Why does it change our ability to compete?” he said.
T-Mobile is already working with Amazon Web Services on Kinetic Edge, combining its wireless network and distributed computing infrastructure with AWS cloud and AI services.
T-Mobile Questions SpaceX’s Shifting Strategy
Gopalan said SpaceX’s shifting strategy was making the company harder to define. “It’s hard to refer to them now as a satellite provider or a satellite provider that is going to build terrestrial,” he said.
He also questioned the value of pairing satellite broadband with T-Mobile’s fixed wireless access (FWA), which delivers internet over cellular networks.
“We’ve got a great product in FWA, and really in many ways, except for some deep rural parts, satellite is an inferior version of FWA with even more constraints in terms of things like what is the size of the beam, right?” Gopalan said. “I don’t see the synergy there between FWA and satellite.”
Two-thirds of T-Mobile’s FWA customers are in dense urban areas, he said, where the company still sees plenty of room to grow using spare network capacity.
TMUS CEO: Satellite Resale Still Welcome
Meanwhile, Gopalan left the door open to other business with SpaceX, including satellite resale through T-Satellite. “If we’re talking about SpaceX as a customer or us being a customer of them, that’s a purely commercial agreement,” he said.
“If it’s a complementary product, I’m very happy to look at a resale arrangement, which is exactly what T-Satellite was, which gets built into it.” He also drew a clear line between the approach and a broader wholesale mobile deal. “But an MVNO is a wholly different thing, so I hope that clarifies where our head’s at on MVNOs and more broadly, satellite.”
The stance is consistent with his earlier comments. Gopalan questioned a Starlink MVNO at a Morgan Stanley conference in March and again on T-Mobile’s April earnings call, when he said satellite usage was lower than expected and mostly concentrated in national parks. He later cited May data showing T-Satellite accounted for just 0.0002% of total network usage.
SpaceX Pursues Towers As Carriers Push Back
SpaceX is gathering spectrum and exploring tower access to build a mobile network combining satellites with ground infrastructure. Earlier this month, Grain Management agreed to sell its nationwide 800 MHz spectrum portfolio to SpaceX, pending FCC approval and other closing conditions. SpaceX is also reportedly seeking access to at least 80,000 U.S. cell sites, with Crown Castle among the companies in talks.
However, established carriers have pushed back. T-Mobile’s parent, Deutsche Telekom, warned earlier this month that a SpaceX MVNO could undercut carriers’ retail pricing. AT&T CEO John Stankey also pointed to incumbents’ extensive spectrum holdings and indoor coverage infrastructure.
Verizon CEO Dan Schulman said: “I see absolutely no benefit whatsoever to extending an MVNO deal to any satellite provider.” He estimated that a competitive ground network would take at least four to six years to build and cost $300 billion to $500 billion over seven or eight years.
How Do Retail Traders Feel About SPCX?
On Stocktwits, retail sentiment for SPCX turned ‘bearish’ from ‘extremely bullish’ levels a week ago amid a 33% rise in 24-hour message volumes.
SPCX sentiment and message volume as of October 28 | Source: Stocktwits
One user said, “$SPCX killer ER couldnt save us.. launches couldnt save us.. Cell towers couldnt save us.. THink 130s and possibly 120s will be seen unfortunately.”
Another user said, “$SPCX down ~3% to about $144 as people sweat the $40B GPU lease. Fitch kept it at BBB+ and has cash at $89.9B vs $38B of debt at end of Sept. That’s plenty of room to fund the buildout imo. Bullish”
SPCX stock has declined 10% year-to-date.
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Deepti Sri has no position in any of the stocks mentioned in this article. StockTwits’ news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits.
