SpaceX SPCX is taking another major step toward entering the U.S. wireless market. The Elon Musk-led company is seeking to secure at least 80,000 cell sites across the country and is reportedly negotiating with major cellular infrastructure providers to make it happen, according to Bloomberg, as reported by Yahoo Finance.
The potential deals could help SpaceX build a nationwide wireless network, positioning it as the fourth major carrier alongside AT&T T, Verizon VZ and T-Mobile TMUS. SpaceX shares rose 1.7% in after-hours trading on Thursday following the report, as investors focused on the company's progress toward building a nationwide wireless network.
However, the report triggered contrasting moves across the telecom and cellular infrastructure sectors. Shares of AT&T, Verizon and T-Mobile fell around 2% to 3% in extended trading.
Crown Castle Among Potential Partners
Crown Castle CCI, one of the largest owners of cellular tower infrastructure in the United States, is reportedly in discussions with SpaceX. American Tower AMT and Vertical Bridge Holdings are also major players in the sector.
Wireless carriers typically lease space on existing towers to install their antennas rather than build and maintain their own infrastructure. Sharing tower sites helps operators control costs while expanding network coverage. SpaceX could follow a similar approach as it works to establish its wireless business.
Tower operators, including Crown Castle and American Tower, gained on expectations that new leasing agreements could create significant business opportunities. CCI stock surged about 6.6% after hours while AMT shares advanced 3.6%.
Starlink and Spectrum to Support Wireless Ambitions
Musk has openly discussed his plans to build a standalone wireless carrier, potentially bringing a well-funded new competitor into an already concentrated market.
SpaceX recently acquired low-band spectrum that could help it combine its Starlink satellite network with terrestrial wireless infrastructure. The company has also received Federal Communications Commission approval to launch 15,000 satellites designed to provide mobile connectivity directly to phones.
Cell towers would provide another key part of the network, helping SpaceX establish dependable connections for users on the ground.
ETFs to Benefit
Pacer Data & Infrastructure Real Estate ETF SRVR puts about 15% weight in AMT shares, while Global X Data Center and Digital Infrastructure ETF DTCR, iShares U.S. Digital Infrastructure and Real Estate ETF IDGT and iShares Select U.S. REIT ETF ICF put considerable assets (in the range of 7% to 14%) in AMT shares.
DTCR also has about 10% exposure to CCI shares, while IDGT has about 5% weight in the stock. No wonder the aforementioned ETFs are likely to gain in light of the above-mentioned report.
We also highlight a few ETFs with significant exposure to SpaceX. MARS Space & Technology ETF MARS, Baron First Principles ETF RONB and Tema Space Innovators ETF NASA are examples of such ETFs.
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Space Exploration Technologies Corp. (SPCX): Free Stock Analysis Report
American Tower Corporation (AMT): Free Stock Analysis Report
AT&T Inc. (T): Free Stock Analysis Report
Verizon Communications Inc. (VZ): Free Stock Analysis Report
Crown Castle Inc. (CCI): Free Stock Analysis Report
T-Mobile US, Inc. (TMUS): Free Stock Analysis Report
iShares Select U.S. REIT ETF (ICF): ETF Research Reports
Pacer Data & Infrastructure Real Estate ETF (SRVR): ETF Research Reports
iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT): ETF Research Reports
Global X Data Center & Digital Infrastructure ETF (DTCR): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).