SpaceX's Mobile Network Expansion Won't Hurt Incumbents in Near Term - Market Talk

Dow Jones17:15

0914 GMT - Space X's accelerated efforts to build a mobile network won't pose a near-term risk to U.S. incumbents, JPMorgan's Sebastiano Petti writes. The Elon Musk-run company agreed to buy cellular spectrum licenses from investment firm Grain Management, a significant move into the wireless service market. However, risk to established players is limited given the time and capital expenditure SpaceX needs to become more competitive, the analysts says. However, sentiment could turn against incumbents as investors adjust to the presence of a new entrant, Petti adds. Telecoms shares fall sharply in the U.S. premarket and Europe. T-Mobile shares drop 6.9% premarket, while Verizon and AT&T drop 5.8% and 6.5%, respectively. In Europe, Deutsche Telekom shares drop 7.6%.

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