Key Takeaways
- Verizon CEO Dan Schulman said SpaceX needs at least four to six years and $300 billion to $500 billion to build a U.S. carrier network, and Elon Musk replied that it will take two or three.
- How long Verizon and AT&T can keep today’s pricing depends on whose timeline is right, and Verizon made $20.1 billion of free cash flow in fiscal 2025.
- SpaceX expects fourth-quarter capex of $35 billion to $40 billion, mostly for its AI build, before it spends anything on cell towers.
- With compute taking most of SpaceX’s capital, Schulman’s timeline looks closer to the truth, which gives the incumbents more time than the recent selloff suggested.
Verizon (VZ) CEO Dan Schulman used Monday’s third-quarter call to put a price and a timeline on a U.S. phone network from SpaceX (SPCX): “a minimum of four to six years” and “somewhere between $300 billion and $500 billion.”
Elon Musk’s response on X? “Will take 2 or 3 years.”
That’s a big gap, and AT&T (T) shareholders should care about it as much as Verizon’s. The longer SpaceX takes, the longer the incumbents keep today’s pricing. AT&T fell nearly 8% last Friday, after Bloomberg reported that SpaceX is in talks to use at least 80,000 U.S. cell sites.
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Schulman says there’s “no shortcut”
Schulman’s argument is that satellites can’t win where the money is: “In suburban and urban areas, where 98% of our revenues are, we’re somewhere between 100x–1,000x more efficient than they are.”
So SpaceX would have to build on the ground. Schulman listed what that takes: 65,000 to 80,000 large cell sites, backhaul, radio equipment and lots of spectrum, and then retail, customer service and back-office systems. All of that gets SpaceX, in his words, “basically the same network and same capabilities and same cost structure as what we have today.”
That’s a lot of revenue to defend. Verizon has booked between $134 billion and $138 billion every year from fiscal 2021 to fiscal 2025…
…and it turned that into $20.1 billion of free cash flow in fiscal 2025, in line with most of the past five years:
Every year a SpaceX network slips is another year of that cash at today’s prices.
Musk’s case rests on better satellites
On Saturday, Musk posted that Starlink V3, “which only just started launching, will have ~100 times more bandwidth than the current V2 system.”
Take that at face value, and on paper it gets SpaceX to the bottom of Schulman’s 100x-to-1,000x range. And a rival CEO has every reason to make the build sound expensive. TD Cowen has estimated that a SpaceX network would cost more than $80 billion, far below Schulman’s figure.
But SpaceX’s own wireless dates have already slipped once. Its next-generation Starlink Mobile service went from the end of 2027 on its August call to “early 2028” on its October call.
Musk’s timeline has to get past his own capex
The bigger problem is money. SpaceX’s capex had already climbed to $20.9 billion in fiscal 2025, from $4.4 billion in fiscal 2023…
…and that was before the AI build took off. SpaceX spent $48.1 billion in the first nine months of 2026, $40.0 billion of it in its AI segment, and it expects fourth-quarter capex of $35 billion to $40 billion. Analysts expect $240.4 billion of capex in 2027.
Spread Schulman’s $300 billion to $500 billion over Musk’s two or three years, and that’s at least another $100 billion a year. Even TD Cowen’s lower figure would add tens of billions a year.
SpaceX is also borrowing to pay for chips. Musk said it closed $40 billion of mostly callable debt for GPUs arriving in the first half of 2027.
Verizon has more time than Musk says
My take: Musk may well get the satellites right. But building a tower network on his timeline means paying for it while the AI build takes most of SpaceX’s capital. That makes Schulman’s four to six years the likelier outcome, and it gives Verizon and AT&T longer to keep their pricing than Friday’s drop in AT&T suggested.
Of course, a tower deal would change that. If SpaceX can lease most of those 80,000 sites, the build gets cheaper and faster. But given Musk’s historic…let’s say optimism, around timelines…I think Verizon still has some room here.
So what is Verizon stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
