By William Gavin

Shares of other telecoms are falling, as SpaceX's Starlink has options to move into the wireless market. A potential partnership with Charter could be one of those options.

SpaceX, led by CEO Elon Musk, and T-Mobile have had an exclusive partnership in the U.S. since 2022.

Through Starlink, SpaceX is set to be either friend or foe to much of the telecommunications industry. Most but not all companies can expect it to be an enemy, according to analysts.

"SpaceX will disrupt the $1.6 [trillion] communications industry, in our view," Oppenheimer's Timothy Horan said in a recent note to clients.

The Financial Times has reported that SpaceX (SPCX) told investors it plans to offer mobile service directly to U.S. customers. SpaceX has also discussed a mobile-phone partnership with Charter Communications (CHTR), according to a report late Friday from Bloomberg. The deal could involve running a portion of SpaceX's traffic through Charter's ground-based internet infrastructure, according to the report.

"Starlink Mobile will far exceed Starlink broadband in the home," SpaceX President Gwynne Shotwell told CNBC this month. As of March, SpaceX provided 10.3 million global subscribers with broadband connectivity.

A deal with Charter could broaden Starlink's reach to "tens of millions of homes and public spaces," while boosting Charter's fixed broadband offerings, Wolfe Research's Peter Supino said in a note to clients. That makes the two companies "potential frenemies," he said.

Charter's stock surged more than 9% on Monday, putting it near the top of the S&P 500 index's SPX list of best performers. It also likely benefitted from plans announced Monday by Comcast (CMCSA), which intends to spin off its media division, NBCUniversal.

Meanwhile, SpaceX's stock rose 7.2% Monday to $164.19, snapping its streak of five straight closes below where it ended its first day of trading, June 12, at $160.95.

BNP Paribas analyst Sam McHugh said that's likely to drive speculation about a merger with either T-Mobile (TMUS) or Charter. Just last year, Charter combined with Cox Communications.

"In our view, a deal with Charter would create synergies but not alter the long-term prospects of the combined businesses," McHugh said in a note to clients on Monday. "A deal with T-Mobile could be more impactful, but would be a negative for Charter and is a genuine risk for that company in the long run."

In a separate note, McHugh said Charter's stock move suggests the "SpaceX/Charter story looms large." He also speculated that the Bloomberg report is the "latest attempt" by SpaceX to get a mobile virtual network operator partnership, or MVNO, with one of the "Big Three" U.S. telecom companies.

A representative for SpaceX didn't immediately return a request for comment. Charter declined to comment.

Playing defense

SpaceX is a growing problem for telecoms. According to TD Cowen's Gregory Williams, the company has a few options to enter Starlink into the wireless market: do nothing, spend heavily on infrastructure, reach an agreement with a major carrier - or acquire one.

That has the industry worried. T-Mobile, Verizon (VZ) and AT&T (T) have proposed a new direct-to-device joint venture that experts say is likely a bid to keep SpaceX from pitting them against each other. The companies have, individually, shot down MVNOs with Starlink.

"We are hopeful but not convinced that no carrier will budge and cave on an MVNO agreement," Williams said. T-Mobile, he said, was the "best fit" for a merger deal.

SpaceX and T-Mobile have been partners since 2022. But there's a brewing "knife fight" between them, industry consultant Tim Farrar noted in a recent blog post. The companies' direct-to-cell exclusivity deal in the U.S., which currently offers Starlink Mobile as a $10 per month add-on to T-Mobile's plans, ends next month.

According to Farrar, the current deal isn't great for SpaceX, which is being paid "seemingly" a lot less by T-Mobile than by other partners. And T-Mobile, Farrar said, doesn't believe it should be paying a large premium for the service. Just 0.0002% of T-Mobile's total network usage in May was tied to satellite coverage, CEO Srini Gopalan has said.

T-Mobile's stock headed toward its lowest close since June 3, 2024, falling about 5% on Monday, according to Dow Jones Market Data. AT&T shares were down 4% and on pace for their worst monthly performance since March 2020, at the start of the COVID-19 pandemic, according to Dow Jones Market Data.

Verizon's stock sank 5.2% and was on pace for its biggest single-day percentage decline since March 11, 2025, when the company warned of an "unusual" first quarter, according to Dow Jones Market Data. In addition to SpaceX's plans, investors are reacting to Verizon's decision to move its international operations into a joint venture with the British BT Group (UK:BT.A).

All three were among the biggest losers in the S&P 500 on Monday, according to FactSet.

"The SpaceX overhang does not have an ending date, which is unfortunate, as the wireless industry is otherwise in a fairly healthy condition, for a welcome change," Williams said.

-William Gavin

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.