Wells Fargo analyst Steven Cahill has revisited the industry implications of SpaceX's push into wireless communications, arguing the satellite and spectrum-based architecture will pressure traditional telecom operators. However, he notes that tower REITs and cable companies could still earn incremental rental income from the parts of SpaceX's network that require terrestrial infrastructure.

Cahill views SpaceX as a disruptive force, with Crown Castle positioned as a potential hidden winner given its tower rental yield of 5.5%. The competitive threat is most acute for T-Mobile, which faces the highest exposure to a new entrant with its own spectrum.

Recent data highlights the shifting dynamics: Charter Communications added 406,000 mobile lines with revenue up 18.9%, while Verizon's fixed wireless additions fell 31% year over year. This underscores the emerging pattern of cable operators strengthening while traditional carriers face pressure.

SpaceX's technical approach relies on home-based small cells and rooftop terminals, requiring significantly less ground infrastructure than conventional networks. This is precisely why the expected boosts to tower and cable companies may not fully materialize, creating a nuanced investment landscape.

During a September 8 program, Cahill explained that the satellite-plus-spectrum model demands fewer ground assets than a traditional fourth mobile carrier model. "The telecom industry is getting another competitor, a much smaller fourth player entering a market dominated by three incumbents. This is unambiguously negative for existing operators," he said.

The Federal Communications Commission has just approved SpaceX's acquisition of 65 megahertz of US spectrum from EchoStar. As of the second quarter of 2026, Starlink subscribers had doubled year over year to 12 million. For investors holding AT&T, Verizon, T-Mobile, American Tower, Crown Castle, SBA Communications, Charter Communications, or Comcast, these developments have become a critical consideration.

Cahill's perspective on the "fourth carrier" debate

Cahill moves beyond the conventional framework of viewing SpaceX as just another fourth carrier. "We don't think adding another market participant to the US wireless market is inherently attractive from a business perspective," he noted. "The deeper motivation is strategic, driven by long-term technological considerations."

The technical rationale is straightforward. SpaceX's second-quarter communications revenue reached $4.29 billion, up 66% year over year. The spectrum acquired from EchoStar provides resources that would be difficult to obtain quickly through auctions. Management plans to activate the 65 megahertz in "late next year," pairing it with ground hardware built in coordination with the satellite constellation.

The initial impact on incumbents will manifest through pricing pressure and margin compression, with wholesale subscriber losses appearing later as a secondary risk. This aligns with the message Verizon CEO Dan Schulman has conveyed to investors, describing a deliberate "shift toward stable, sustainable service revenue, reducing low-margin, promotion-heavy business." Such adjustments typically occur when companies anticipate intensifying price competition.

How the satellite architecture changes industry math

Cahill explained the operational logic plainly: "They don't need the same scale of spectrum resources, nor the same scale of towers and transmission facilities. They already have a massive and expanding satellite constellation."

Spectrum is a limited resource, with auctions frequently commanding tens of billions of dollars. Mobile virtual network operators can lease network access from others, avoiding the need to build their own spectrum and towers, while WiFi offloading shifts phone traffic to fixed broadband networks, conserving cellular capacity. SpaceX's self-described approach relies on a large number of small cells and rooftop Starlink terminals for ground network handoffs, requiring significantly less capital than scaling up macro tower infrastructure.

However, this investment thesis has a critical flaw: if SpaceX relies entirely on its own rooftop terminals, bypassing existing US tower assets, the expected incremental revenue for tower leasing may never materialize. During the second quarter earnings call, when directly questioned, Crown Castle only stated that its owned sites could provide "space, power, and backhaul," welcoming satellite operators but confirming no agreements have been signed.

Who benefits if the analyst's assessment holds?

Cahill identifies potential beneficiaries: "The network will still use towers, and it will also need to partner with cable operators to build a WiFi-offload-based MVNO. From an industry perspective, both directions present potential winners."

Tower REITs collect steady rent regardless of which operator wins customers. American Tower offers a yield of approximately 3.93%, with fiscal 2026 adjusted funds from operations guidance of $11.00–$11.17 per share. Crown Castle, following the divestiture of its fiber business, has become a purer play with a yield of about 5.5%; however, AT&T contributes 28% of its site leasing revenue, with a $774 million lease renewal due in 2028. SBA Communications is focused on international expansion, with second-quarter international site leasing revenue up 30.5%.

In the cable segment, Charter Communications' Spectrum Mobile added 406,000 subscribers, with mobile revenue up 18.9% year over year to $1.095 billion. Comcast's wireless subscribers surpassed 10 million, with approximately 90% of traffic offloaded via WiFi. Among traditional carriers, Verizon's fixed wireless net additions fell 30.6% year over year, an early visible sign of satellite broadband capturing market share.

Is SpaceX stock worth buying?

SpaceX's second-quarter total revenue was $7.81 billion, with adjusted EBITDA of $3.54 billion and cash reserves of $93.5 billion. The stock trades at roughly 85 times trailing twelve-month sales. Among incumbents, T-Mobile carries the highest risk: once SpaceX controls its own spectrum, the satellite-direct-to-phone partnership between T-Mobile and SpaceX loses its differentiation. The stock has declined 23.18% over the past year.

AT&T treats satellite as a supplementary capability with stronger defensive characteristics; CEO John Stankey has stated the company can carry 98% of its traffic even without a satellite wholesale partner. Verizon is up 29.99% year to date, with the share price already reflecting optimism about its fiber transformation.

From a personal investment perspective, following this logic, infrastructure asset owners present a cleaner allocation. Crown Castle is the most direct tower play, offering yields that traditional carriers cannot match. Investors seeking growth potential may consider SpaceX, but must accept a triple-digit price-to-sales multiple. Crown Castle, conversely, leans toward an income-oriented profile at a significantly lower valuation.