Musk's Phone Plan Is "Not Viable," Says the CEO Whose Price Target Just Got Cut
AT&T's John Stankey says satellite will never beat fiber. In the same week, SpaceX stacked $19.6 billion of airwaves and two FCC wins, and Scotiabank cut its target on every major U.S. carrier.
Vincent Jiang · 3 min read
John Stankey has called Elon Musk's plan to turn SpaceX into a phone carrier "not a viable strategy" 1. Scotiabank still cut his price target, one of four U.S. carrier targets it lowered on 2 October 7.
The charge: "quite a few" of your customers
On SpaceX's first earnings call as a public company in August, Gwynne Shotwell promised a true mobile service and said she expects to take "quite a few" customers from the big three carriers, a prize she and Musk sized at a $600 billion U.S. wireless market; telecom shares fell the next day 12. Starlink backs the talk with 12 million subscribers, 10,200 satellites, coverage in 167 countries as of June, and connectivity at 55% of sales 1.
SpaceX stacks airwaves and approvals
Since then, EchoStar agreed on 8 September 2025 to sell its AWS-4 and H-block licenses for about $17 billion, half cash and half SpaceX stock, plus roughly $2 billion of funded interest payments 3; with a second deal, SpaceX ended up holding 65 MHz for $19.6 billion 4. This month it won FCC clearance for international telecommunications services 5, and on 30 September the commission opened more than 1,000 MHz in the 12.7 and 42 GHz bands and exempted space operations from a layer of environmental review 6. SPCX rose about 6.5% on 2 October 7.
The defense is fiber and physics
Stankey's answer, to Axios on 29 September beside a $3 billion Corning fiber deal: fiber runs three times faster than satellite, and satellite "at its best" over the next decade is "still not going to beat fiber" 1. Base stations mounted next to Starlink dishes would cost as much as a macro network, he argued, and the law bars radiating cellular signals from a house without permission 1. T-Mobile finance chief Pete Osvaldik compressed the case: "You can have a million satellites up there with all the spectrum in the world; you can't break the fundamental laws of physics" 5.
T-Mobile's own data undercuts the camp
Chief executive Srini Gopalan called the Starlink threat "exaggerated" yet conceded usage of T-Satellite, his Starlink-powered service, came in below expectations 2. New Street's David Barden argues 65 MHz cannot replicate networks built on roughly 1,000 MHz 2. And the three carriers, rivals everywhere else, finalized a pooled satellite venture on 1 October under interim chief Paul Roth, which analysts read as defensive 48.
Scotiabank cut every target anyway
The court repriced the defendants. On 2 October Scotiabank lowered all four targets and kept every rating, citing SpaceX's mobile push and AI agents; Morgan Stanley separately called bill-shopping agents a key investor fear and ranked wireless better positioned than cable 7.
Scotiabank cut its target on all four carriers and kept every rating
- Previous target
- New target
Data
| Previous target | New target | Change | |
|---|---|---|---|
| Verizon | $52.50 | $51.50 | -1.9% |
| T-Mobile US | $232.00 | $217.00 | -6.5% |
| AT&T | $29.25 | $27.50 | -6.0% |
| Comcast | $29.00 | $27.50 | -5.2% |
The market had voted earlier. T-Mobile is down 18.24% this year and Comcast 21.81%, against a gain above 22% for the Nasdaq 100 tracker, with AT&T off 0.92% and Verizon up 13.64% 7.
Comcast and T-Mobile are down more than 18% in 2026 while the Nasdaq 100 is up more than 22%
Data
| Value | |
|---|---|
| QQQ (Nasdaq 100) | 22% |
| Verizon | 13.64% |
| AT&T | -0.92% |
| T-Mobile US | -18.24% |
| Comcast | -21.81% |
2027 decides who was right
The carriers hold the physics; SpaceX holds the spectrum, and 2027 arbitrates. Next-generation direct-to-cell satellites are due to launch that year, with full service targeted by year end and Shotwell promising something "100 times better" 2. Watch whether the pooled venture prices like a moat or a bunker, and if AI agents start shopping bills, Morgan Stanley's ranking puts Comcast on the thinnest ice 7.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
