SpaceX in talks to buy Boost Mobile after carriers rebuffed Musk

Key Points

1. SpaceX has held talks with EchoStar about acquiring Boost Mobile or leasing its network, two people said.
2. Verizon, T-Mobile and AT&T all refused SpaceX access to their networks for a mobile service.
3. A Boost deal would be Musk's entry point into a $235 billion U.S. wireless market.

The latest:

SpaceX has been negotiating with EchoStar in recent months over a deal that could hand it Boost Mobile outright or give it access to Boost’s network, two people familiar with the talks told The Washington Post. Elon Musk discussed the transaction personally in a meeting last month with EchoStar Chairman Charlie Ergen. The approach follows rejections from all three major U.S. carriers.

Details:

• The rebuff: Musk approached the leadership of Verizon and other telecom companies in recent months asking for access to their networks so SpaceX could launch its own mobile service, The Washington Post reported. Verizon, T-Mobile and AT&T all said no, according to interviews with nearly a dozen telecom industry figures who spoke anonymously.
• The target: Boost Mobile is a discount carrier aimed at low-income customers, owned by EchoStar. Its network capacity is leased from AT&T and T-Mobile US — meaning the very carriers that turned Musk down could end up carrying his service, two people familiar with the negotiations said.
• The catch: Three of the people said a carrier’s lease agreement would not normally transfer to a new buyer without the major carrier’s permission. The proposed service may therefore require consent from AT&T and T-Mobile before it can launch.
• The market: Equity research firm MoffettNathanson estimates the U.S. wireless market is worth $235 billion. Musk has set a revenue target for SpaceX of $1 trillion annually as soon as 2027, and has said the company’s valuation could eventually exceed the economy of the planet.
• The spectrum buy: SpaceX last month agreed to pay $8 billion for wireless spectrum licenses tailored to cell service in places satellites cannot reach. Musk wrote on X that it was the last critical piece of the spectrum puzzle needed to provide complete phone coverage in America.
• The stated goal: On a recent earnings call, SpaceX Chief Financial Officer Bret Johnsen said the company aims to “become a major mobile carrier … in the United States.” Musk has described turning SpaceX into a multi-service company rather than a launch provider.
• The Mars link: Two people familiar with the talks said SpaceX wants a built-out mobile network to convert its more than 12,000 satellites into a major revenue source and advance its goal of a human settlement on Mars, which would need satellite-based communications.
• The technical limit: Satellite-industry analyst Tim Farrar, president of TMF Associates, said SpaceX’s satellite signal is not currently strong enough to support coverage indoors or in dense urban areas. A Boost deal would let SpaceX use traditional cell towers while it improves satellite connectivity.
• The timeline fight: Verizon’s CEO said building out the required towers and antennas would take SpaceX four to six years; Musk estimated roughly half that. Musk has a record of optimistic timelines. Verizon and EchoStar declined to comment, while AT&T, T-Mobile, SpaceX and Musk did not respond to requests for comment.

Background:

SpaceX has built its business on rocket launches and satellite deployment, and Musk has pushed to diversify it into new service lines. Major carriers have publicly doubted he can replicate the ground infrastructure of towers and antennas that his company lacks.

Between the lines:

The rejections by all three major carriers and the Boost route point the same way: SpaceX needs terrestrial infrastructure it does not own, and the lease-consent requirement means AT&T and T-Mobile may retain a veto even after a purchase. Polen Capital portfolio manager Drew Cupps argued carriers doubt Musk’s build-out ability at their own risk, citing his 80,000-charger Supercharger network, and said the first carrier to ally with him could gain on rivals.

What’s next

Whether EchoStar and SpaceX reach an agreement on Boost Mobile, and whether AT&T and T-Mobile consent to transferring the network lease. SpaceX’s $8 billion spectrum purchase and its next earnings call are the other markers.