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From the newsletter (November 2; check in or follow up if you want it earlier): SpaceX is reportedly in talks to buy Boost Mobile from EchoStar, potentially securing an MVNO route in US Wireless. Analysts question the strategy, warning of regulatory hurdles and limited prospects for wholesale access.
take a snap. A report and The Washington Postrecorded everywhere, says SpaceX is in talks to buy Boost Mobile from EchoStar (the WSJ link is behind a paywall), or otherwise using his network as a way to gain “backdoor access” to one of the “big three” networks in the US. This spelling, and RCRis culled from an equity research note on the matter by BNP Paribas, which concludes: “Amid the current ‘glass half empty’ sentiment on wireless, we expect this story to be taken negatively, even though it may point to the fundamental challenges SpaceX faces in actually setting up a fourth network. It writes: “The news also just confirms our view that SpaceX has had no consistent strategy for wireless — other than trying to scare a wireless carrier into giving it a Becoming an MVNO – because obviously it would have just been better to buy EchoStar in the first place if this was really his goal.
Sam McHugh, senior analyst at the company, says: “Our understanding is EchoStar either cannot white-label the MVNO or there are change of control clauses in the deal with AT&T. (The T-Mobile deal is already closed). This means that there is no backdoor to an MVNO in this way. It strengthens an argument that telcos are acting anti-competitively… It seems unlikely that SpaceX will have much pleasure in going down the legal route to try to get an MVNO/wholesale access to receive … This news is not surprising because we continue to receive reports about all the things that SpaceX could make… The thrust [represents] a slight shift from news a few weeks ago, when SpaceX was reportedly in talks with tower companies. This seems to suggest that an MVNO is still his preferred route. Of course, the two are not mutually exclusive. The fact that an MVNO deal eases the way to build a fourth network in a more economical way is one of the core reasons [it] is such a bad idea for the big three carriers.