Telstra (ASX:TLS) shares fell 2.5% to A$4.65 on Monday 12 October 2026, a six-week low, while TPG Telecom dropped 4.9% to A$3.69, its steepest daily fall since early June. Australian telcos sold off after SpaceX agreed to buy low-band mobile spectrum in the US for its Starlink Mobile service, even as the ASX 200 rose 0.8%.
What SpaceX is buying
According to Via Satellite, SpaceX agreed to acquire 14 MHz of paired, nationwide spectrum in the 800 MHz band from investment firm Grain Management. The deal needs approval from the US Federal Communications Commission (FCC).
Neither company disclosed the price, but The Wall Street Journal reported SpaceX will pay about US$8 billion in cash. SpaceX said the spectrum addresses “one of the key remaining technical gaps” in its plans for Starlink Mobile.
Low-band spectrum travels further and works better indoors than higher frequencies. Combined with satellites, it could let Starlink Mobile compete more directly with traditional carriers. US carriers AT&T, Verizon and T-Mobile all fell sharply on Friday, according to Forbes.
Why Australian telcos fell
The spectrum is in the US, so the deal does not directly change competition in Australia. Investors are weighing the longer-term risk of direct-to-phone satellite services challenging telcos that run their own tower-based mobile networks.
Other ASX telcos also fell on Monday, including Superloop (down 2.4%) and Aussie Broadband (down nearly 2%), according to Investing.com.
One analyst quoted in the same report saw Telstra as particularly exposed because of its reliance on network coverage, with the nearer-term risk to regional pricing power rather than subscriber numbers. Citi took a different view, keeping its buy rating on Telstra and arguing the deal highlights the value of owning terrestrial spectrum.
Telstra is buying back its own shares
Telstra is in the middle of an on-market buy-back of up to about A$1 billion, running from 15 September 2026 to 30 June 2027. Its latest ASX notice shows it bought 5,284,150 shares on Friday 9 October at A$4.76 to A$4.84, costing about A$25.3 million.
That brings the total to roughly 54.2 million shares for about A$261.6 million, or about a quarter of the program. Monday’s close of A$4.65 is below the price range Telstra paid on Friday.
What Telstra and TPG investors should watch
- FCC approval of the SpaceX deal
- Any Starlink Mobile plans for Australia, which would turn a US story into a local one
- Telstra’s daily buy-back notices, to see whether it steps up purchases at lower prices
- Director trades in Appendix 3Y notices at either company. Our Megaport insider trading analysis shows why the type of trade matters
Bottom line
Telstra and TPG shares fell as investors weighed a future where satellite operators compete for mobile customers, even though nothing has changed in Australia yet. With its buy-back still running, Telstra is putting company money into its own shares while the market weighs the threat.
