BofA Says SpaceX Wireless Push Could Lift T-Mobile, Tower Stocks Instead of Threatening Them — BigGo Finance

Bank of America analysts say SpaceX’s ambitions to expand into wireless services would more likely support T-Mobile US (TMUS) and cellular tower operators than disrupt their businesses, following discussions with executives at both companies.

The assessment, led by BofA’s Michael Funk, comes after calls with T-Mobile Chief Technology Officer Dr. John Saw and leadership at Crown Castle (CCI), one of the largest tower operators in the United States. The central question was whether SpaceX, with its deep financial resources and engineering talent, could build a ground-based mobile network that rivals incumbent carriers.

Dr. Saw was blunt about the challenge. If SpaceX attempted to construct a network primarily through customer-installed femtocells, compact internet-connected devices that provide localized cellular coverage, the math quickly becomes prohibitive. Matching just T-Mobile’s outdoor footprint would require between 500 million and 1.5 billion femtocell units nationwide, according to his estimates. At roughly $1,000 per unit, the total investment could range from several hundred billion dollars to well over a trillion.

To put that figure in perspective, Saw estimated that New York City alone would need about four million femtocells. The devices also fail to deliver seamless mobility as users travel between locations, struggle with dependable indoor coverage, and cannot manage high-speed highway transitions, areas where traditional macro cell towers excel.

Crown Castle executives echoed that skepticism, describing femtocells as best suited for targeted gap-filling rather than serving as a substitute for macro network infrastructure.

Why Existing Infrastructure Matters

If SpaceX does pursue a serious ground-based network, BofA believes the company would likely leverage existing tower infrastructure rather than build from scratch. Crown Castle pointed out that current tower sites already offer available space, electrical power, fiber backhaul, established permitting, and mature leasing frameworks, all of which accelerate deployment compared with greenfield construction.

As a reference point, Dish Network managed to expand across 20,000 tower sites over four years despite constrained capital, eventually growing to more than 5% of Crown Castle’s revenue. SpaceX, with substantially larger financial resources, could theoretically move even faster if it commits to an all-in terrestrial network strategy.

That prospect of increased tower leasing demand is a key reason BofA views the SpaceX development favorably for Crown Castle and peer tower companies.

Spectrum Constraints and Partnership Potential

BofA also highlighted a fundamental constraint: SpaceX holds limited cellular spectrum assets. Attempting to use identical frequencies for both satellite and terrestrial services could trigger interference issues and force capacity trade-offs, diminishing network performance.

This scarcity could push SpaceX toward partnerships with incumbent carriers or spectrum-sharing arrangements, a scenario that would benefit T-Mobile. Satellite backhaul may work for remote or backup applications, while cable partnerships or spectrum-hosting agreements could help, though both would require infrastructure investment and willing counterparties.

The bank’s final assessment is that direct-to-device satellite connectivity is likely to remain a complementary technology, primarily serving users in remote or underserved regions beyond the reach of conventional cellular infrastructure. Matching established carriers on network coverage, capacity, indoor performance, and overall reliability would require years of focused execution and substantial capital commitment, even for a company with SpaceX’s capabilities.

Wall Street analysts maintain a Strong Buy consensus rating on T-Mobile stock based on 14 Buys, three Holds, and zero Sells assigned in the past three months. The average price target of $237.73 per share implies approximately 31.6% upside potential from current levels.