If you caught last night's football game, perhaps you noticed the multiple advertisements run by T-Mobile US (TMUS 1.56%) touting the company's offer to let anyone in the U.S. -- not just its own customers -- participate in its new direct-to-cell (DTC) collaboration with SpaceX's Starlink service.
Well, investors noticed the commercials as well. And thanks to them, T-Mobile stock is up 3% through 10:50 a.m. ET in Nasdaq trading on Monday. What's truly curious, though, is that at the same time as T-Mobile stock is inching higher, shares of a pair of satellite communications company stocks, AST SpaceMobile (ASTS +2.52%) and Globalstar (GSAT 0.41%), are doing much, much better.
In fact, AST's gain today is an astounding 23%, and Globalstar stock is up a solid 11.3%, both multiples of the gain that T-Mobile stock is enjoying.
NASDAQ: TMUS
Key Data Points
T-Mobile's cosmic commercial
As the one-minute commercial unfolded, a voiceover pointed out how, across the U.S., some 500,000 square miles of terrain are "unreachable by cellphone." To solve this problem, T-Mobile says it has partnered with Starlink to launch "hundreds" of DTC satellites, thus creating -- and this is key -- "the only space network that automatically connects to the phone you already have."
Is the claim accurate? It depends on how you read it.
In a press release this morning, T-Mobile confirmed that beta service with Starlink DTC satellite cellphone service has already begun. And to familiarize customers with the concept of using off-the-shelf cellphones (i.e., not satellite phones) to call other off-the-shelf cellphones without the use of cellphone towers, T-Mobile is allowing anyone with a cellphone in the U.S. sign up for the service for free through July 2025, whether or not they're customers of T-Mobile.
After that, service will be restricted to T-Mobile customers, and included in the cost of the company's "Go5G Next" and similar plans (and available as an add-on to customers of other T-Mobile plans).
What this means for T-Mobile -- and for everybody else
Still, you might imagine that claim would upset shareholders of Globalstar and AST SpaceMobile, which are also planning to offer their own DTC services to their own partners' customers. Globalstar is partnered with Apple after all, and AST is paired with AT&T and Verizon -- none of which three stocks is moving very much at all today.
In contrast, stocks of the providers of DTC services, Globalstar and AST, are moving quite a lot.
Why is that? Well, contrary to what you might think after reading T-Mobile's press release, Globalstar does already offer emergency text service to owners of Apple smartphones. It's just perhaps not a "space network" as T-Mobile is defining it, if you need to own a specific brand of cellphone to access it. And AST is only awaiting the go-ahead from the Federal Communications Service before AT&T and Verizon will be able to run their own commercials touting beta service for DTC calls through their own networks.
In other words, from one perspective, T-Mobile's ad may look like an attempt to steal customers away from AT&T and Verizon by offering a service that they don't have (yet). And over the next six months, I think that may in fact be what happens. Looked at another way, though, T-Mobile's ad is sort of free advertising for Globalstar and AST, promoting services that they offer too, or are about to start offering soon.
So while not clear and distinct positives for these other space stocks, investors seem to agree that this development is positive enough to make both Globalstar and AST stocks more valuable today, too.
