Jul. 8 at 3:25 PM
Wells Fargo initiated coverage of the 3 major US wireless carriers w/ a cautious sector outlook, flagging
$SPCX Starlink as a growing competitive threat to fixed wireless access & postpaid account growth across the industry
Initiates
$T at Underweight w/ a TP of
$18 - calling it "least likely to strike a Starlink Mobile MVNO" & therefore most exposed to satellite competition
AT&T is "most at-risk to net add & PP account share loss," est'g a 20% probability of a Starlink MVNO deal vs 30% for T-Mobile & 40% for Verizon
$VZ was initiated at Equal Weight w/ a TP of
$43 price target & named Wells Fargo’s most preferred telco.
Verizon has "the most to lose & the most to gain from an MVNO w/Starlink" applying a 40% probability to such a deal. A Verizon-Starlink Mobile MVNO "would be mid-to-high single digit percentage accretive to EBITDA/EPS by 2032"
$TMUS was initiated at Equal Weight w/ a TP of
$170 & while T-Mobile has historically been the sector’s share gainer, 2 shifts could pressure postpaid account net adds, including Verizon becoming "less of a wireless share donor" & Starlink reducing industry-wide growth. A 30% probability of a T-Mobile Starlink MVNO suggests "success could mean it doesn’t perceive value in a partnership"
Note: The physics of line-of-sight remain Starlink’s biggest hurdle to becoming a standalone telecom giant. Satellite beams can't reliably penetrate skyscrapers or subways. To offer true, indoor/outdoor nationwide coverage, SpaceX must move past pure satellite tech. Their realistic paths forward to bypass line-of-sight limits include:
1) Build & deploy micro-cells
2) Broker an MVNO Deal
3) Embed Satellite-Ready Hardware into smartphones
4) Leverage Spectrum Acquisitions - EchoStar spectrum
5) Utilize Portable Bridges - Like Starlink Mini router
6) Deploy a Wi-Fi "Backdoor" - Partner w/ a massive cable provider
7) Buy a Telecom Outright
