SpaceX CEO Elon Musk put U.S. wireless carriers on notice last week after buying airwaves from Grain Management.

Pending FCC approval, SpaceX will acquire Grain’s low-band spectrum license portfolio of up to 14 MHz of paired spectrum in the 800 MHz band. News of the deal – worth $8 billion according to the Wall Street Journal – caused shares of AT&T, T-Mobile and Verizon to drop significantly. The decreases were the biggest single-day declines for AT&T and Verizon in more than 24 years and T-Mobile’s worst decrease in more than 14 years.

The licenses SpaceX bought enable wireless service from cellphone towers rather than satellites, which fit with its strategy of extending its satellite service beyond broadband into the wireless market. Musk said the deal would help make SpaceX’s Starlink Mobile a major U.S. carrier.

“This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America,” Musk declared on X.

On its website, SpaceX claimed, “This prime low-band spectrum addresses one of the key remaining technical gaps that will pave the way for Starlink Mobile to become a major mobile carrier in the US.”

The move drew a combative social media response from T-Mobile CTO John Saw, while analysts were skeptical about how much SpaceX’s entry into the wireless market could hurt the established competition.

“I have tremendous respect for what SpaceX has accomplished in space,” Saw wrote on LinkedIn. “But having spent decades building wireless networks here on Earth, I can tell you there's a big difference between owning spectrum and delivering a great mobile experience to millions of customers.”

Saw outlined what he called “a few things worth keeping in perspective.” First, the approximately 14 MHz of spectrum that SpaceX acquired from Grain is a far cry from T-Mobile’s nearly 400 MHz of mid-band and low-band spectrum holdings [ed note: Grain acquired the bandwidth it sold to SpaceX from T-Mobile in August.] Second, even lower-frequency spectrum used for satellite connectivity faces more challenges than a nearby cell tower. Third, terrestrial networks have a huge advantage for indoor coverage, where most mobile traffic takes place. Fourth, a 5G-Advanced network is faster and more responsive than satellite. Finally, SpaceX is up against established wireless carriers that have invested hundreds of billions of dollars in network infrastructure.

“You can acquire spectrum in a single transaction,” Saw wrote. “You cannot acquire a nationwide, high-performing wireless network overnight. If this is truly the beginning of a new wireless provider in America, we welcome competition. It's good for innovation, good for the industry, and most importantly, good for customers. But great wireless networks aren't built with headlines or spectrum licenses alone. They're built site by site, neighborhood by neighborhood, in subway tunnels, office buildings, stadiums, and communities across America.”

Raymond James analyst Frank Louthan wrote a note that agreed with T-Mobile’s claim that SpaceX is years away from providing serious competition.

"Owning spectrum and building a robust five-nines modern mobile network that performs to the ubiquitous standards consumers are accustomed to are two different things, and we believe the incumbents have significant advantages in terms of spectrum and terrestrial network capabilities," Louthan wrote.

Anshel Sag, principal analyst at Moor Insights & Strategy, told Fierce Network, “I just have a hard time thinking that this is the moment when everything changes. This is a very long road for them, and I really think my biggest criticism of this entire endeavor is that I don't think SpaceX is being transparent with their investors about how much they actually need to invest to make this a viable competitor to the Big 3.”

Pivotal Research Group analyst Jeffrey Wlodarczak predicted in a research note that Starlink could emerge as a fourth major U.S. wireless carrier, claiming it could capture 13% of the U.S. mobile device market by 2036. Pivotal forecasts approximately 160 million Starlink Mobile subscriptions worldwide over the next decade, with 50 million in the United States.