Shares of Verizon and AT&T are heading for their worst weekly performance in years, driven by mounting alarm over the competitive threat posed by SpaceX’s Starlink satellite internet service. The two telecom giants have seen steady selling pressure this week as investors reassess the risk that low-latency satellite broadband could erode their customer bases and pricing power.
The catalyst: mounting expectation that SpaceX will go public, potentially as soon as July 7. The prospect of a public Starlink entity has traders recalibrating the telecom landscape. Starlink already serves over 2 million customers globally, and a deeper capital pool from an IPO would accelerate its expansion. AT&T and Verizon, meanwhile, face stagnant legacy revenue and heavy infrastructure costs.
The pain extended beyond the traditional carriers. AST SpaceMobile, a satellite-to-phone startup that competes directly with SpaceX, saw its stock fall 21.6% in June — a sign that the rising tide of SpaceX expectations is lifting only one boat. Broader telecom and satellite indices have felt the drag, though the AI-driven semiconductor sector — including names like Broadcom and ON Semiconductor — remains insulated from the space-based disruption.
Not all analysts see Starlink as an existential threat. Some argue that terrestrial 5G networks retain a reliability and capacity advantage in urban areas, and that regulatory hurdles for satellite broadband remain significant. Still, with a potential SpaceX IPO days away and telecom earnings season approaching, the pressure shows no signs of easing.