BNP Paribas comemnts on SpaceX talks with tower firms

Investing.com -- SpaceX is in discussions with tower companies to secure at least 80,000 cell sites across the United States, according to a report from Bloomberg. BNP Paribas analysts said the move represents a final decision point for the company between building its own network or pursuing a mobile virtual network operator agreement.

The investment bank estimates SpaceX would need to spend at least $100 billion before generating any revenue from a mobile network, excluding spectrum costs and financing expenses. This calculation includes $75 billion in capital expenditures and $30 billion in cumulative operating costs.

The proposed network would require agreements with multiple tower operators. American Tower and Crown Castle together own approximately 80,000 US towers split evenly between them, while SBA Communications operates an additional 17,000 towers. The analysts expect SpaceX is negotiating with all three companies, plus Vertical Bridge and potentially Array Digital.

Once SpaceX signs take-or-pay master lease agreements with tower companies, the contracts cannot be canceled without payments equal to lifetime lease costs, according to the analysis. The bank views this as the final opportunity for SpaceX to secure an MVNO deal before committing to infrastructure buildout.

The cost breakdown includes $25 billion for 80,000 macro sites at $300,000 per site, $40 billion for a constellation of 15,000 mobile satellites with ground infrastructure, and $5 billion for 50,000 small cells and network elements. Creating a nationwide retail presence would add another $5 billion.

Operating expenses would scale from zero to over $8 billion annually as the network builds out over an estimated five-year period. The bank said this timeline assumes 15,000 towers can be deployed each year.

BNP Paribas suggested telecommunications carriers, particularly T-Mobile, could offer SpaceX a wholesale network slice for future artificial intelligence device connectivity while reselling Starlink broadband services.

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