Elon Musk just nuked AT&T
Note from Charles: The tech-fueled free market has an inconvenient way of breaking down natural monopolies and drying up competitive moats.
Or at least inconvenient from the perspective of the monopolist. It works out great for you and me. We get better service at a better price.
As my friend Andy Swan put it in his latest market missive, Elon Musk just nuked AT&T. The company’s legacy infrastructure simply cannot compete with Starlink in terms of coverage and convenience. You can buy a Starlink router at any electronics store (or have it delivered to your doorstep) and install it yourself in minutes. There’s no waiting for the installation guy… No sitting around your house between the hours of 8am and 6pm waiting for the van to show up… No endless minutes waiting on hold.
I take my Starlink to the beach with me in rural Peru. The electricity might fail on me (it’s rural Peru)… but the Starlink never does.
As someone just old enough to remember what life was like before telecom was deregulated — and how truly awful service was back then — I’m not going to shed too many tears over AT&T’s demise.
I am, however, very interested to see who the ultimate winners and losers are here. And Andy has laid it out for us nicely.
Enjoy!
Charles Lewis Sizemore, CFA
Elon Musk just nuked AT&T
By Andy Swan
When Alexander Graham Bell patented the telephone in 1876, the world was still wired to the telegraph. Western Union controlled nearly every mile of telegraph line in America. It was the ultimate monopoly: the “last mile” of communication.
Western Union executives laughed at Bell’s invention. They called the telephone “an electrical toy” that had no chance of replacing their entrenched network. After all, they owned the wires. They owned the poles. They owned the infrastructure.
But they made one fatal mistake: they assumed infrastructure was the moat.
Within a decade, the telephone bypassed the telegraph entirely. Instead of relays and Morse code operators, people spoke directly to one another. Western Union’s vast last-mile network of wires, stations, and clerks was suddenly worthless. Bell’s company went from upstart to empire-builder almost overnight.
That same story just repeated itself.
Last week, SpaceX (private)—through its Starlink division—purchased EchoStar’s wireless spectrum for $17–19 billion. It wasn’t just an acquisition. It was a death blow to today’s telegraph barons: AT&T (T), Verizon (VZ), and T-Mobile (TMUS).
Starlink’s End Run Around the Tower Monopoly
For decades, wireless carriers have relied on a similar moat to Western Union’s: the last-mile network of towers, backhaul, and spectrum rights. They controlled the pipes. If you wanted mobile coverage, you paid them.
Starlink just erased that advantage.
By acquiring 50 MHz of exclusive S-band spectrum in the U.S. and mobile satellite licenses worldwide, Starlink satellites will soon function as cell towers in space. No new hardware is required. Your existing smartphone will simply ping satellites directly—anywhere on Earth.
The rollout starts with basic texting and emergency signals. But it won’t stop there. Soon, voice calls, video chats, and broadband data will beam down from orbit, indistinguishable from terrestrial LTE and 5G.
Just as Bell’s telephone bypassed the telegraph network, Musk’s satellites will bypass the wireless tower grid. The “last mile” is no longer owned by the incumbents—it belongs to the sky.
The Battlelines: Winners vs. Losers
Make no mistake—this is now an arms race. And only a few players will survive.
Winners:
Starlink/SpaceX: Musk just turned Starlink from a niche ISP into a global carrier. This is not incremental—it’s existential. They now control the largest non-terrestrial LTE/5G footprint on Earth.
T-Mobile: By cutting a deal with Starlink early, they’ve secured a decisive edge. They will be first to market satellite roaming as a premium—or bundled—feature. Coverage bragging rights just swung heavily in their favor.
EchoStar: They walk away with $8.5B in cash and $8.5B in SpaceX stock. They sold their spectrum at the exact moment it became world-changing.
Losers:
AT&T: Their rural coverage advantage evaporates overnight. Every oil rig, farm, and disaster zone that used to be “AT&T territory” is now Starlink territory.
Verizon: They’ll fight to protect enterprise and government contracts, but even those clients will see the value of global satellite redundancy. Their “most reliable network” marketing line is toast.
AST SpaceMobile (ASTS): Shares plunged 14% immediately, and for good reason. They now need billions in fresh capital just to stay in the fight. Yes, AT&T and Verizon are propping them up, but that’s a defensive marriage of desperation.
Legacy Towers and Infrastructure: Every steel tower, every mile of fiber backhaul, every sunk cost is now a stranded asset in the making. The moat has dried up.
The battlelines are drawn:
Musk + T-Mobile: offense, vision, speed, capital.
AT&T + Verizon + ASTS: defense, fear, bureaucracy, regulatory delay tactics.
One side is building the future. The other is fighting to preserve the past.
What’s Next
Starlink will move quickly. Expect SMS coverage within the year, followed by phased rollouts of voice and broadband services. T-Mobile will market this as the ultimate coverage edge, forcing AT&T and Verizon to double down on their ASTS partnership.
Regulators will be weaponized. Expect AT&T and Verizon to lobby aggressively at the FCC to slow Starlink’s rollout. Expect headlines about interference, safety, and national security. But those are stall tactics—not solutions.
The market will see through it. Consumers will follow convenience. Enterprises will follow resilience. Governments will follow coverage. Musk has all three.
How Investors Will Know Who’s Really Winning
LikeFolio will be watching this space closer than anyone. Because while Wall Street debates spectrum maps and capital requirements, the truth will show up in consumer behavior first.
Which carrier’s subscribers stay put.
Which ones churn.
Which ones brag about coverage.
Which ones complain about outages.
Our consumer demand and sentiment data will reveal the winners and losers in real time. That’s how our members will know when the market is missing the turn—and where the money is flowing next.
The space war is over. Musk won. But the profit opportunities are just beginning.
This piece was originally published by LikeFolio Infinite Investor.