US telecommunications stocks fell on Friday after a report that SpaceX was seeking access to at least 80,000 cellular sites to build a nationwide wireless network, intensifying concerns that Elon Musk's company could become a formidable new competitor to established mobile operators.

AT&T shares dropped 5.6% to their lowest level in more than three months, while T-Mobile declined 5% and Verizon lost 1.6%. In Europe, Deutsche Telekom, which owns more than 50% of T-Mobile, fell 3.2%, indicating that concerns about SpaceX's expansion could extend beyond the US market.

The sell-off followed a Bloomberg News report late Thursday that SpaceX was in discussions with cellular infrastructure companies about securing access to at least 80,000 sites. Citing people familiar with the matter, the report described an effort to build a wireless carrier from the ground up, potentially placing the company in direct competition with the country's largest telecom operators.

"The competitive impact may still be years away, but anticipation alone, reinforced by each successive spectrum and infrastructure move, is likely to remain an overhang on sector sentiment," Bernstein analysts said in a note.

The reaction shows that the prospect of a new competitor can weigh on telecom valuations well before a service launches or begins taking meaningful market share. Investors are increasingly having to account for SpaceX's ambitions as a potential long-term threat, even though the company faces substantial technical, financial, and operational hurdles before it can match the reach of established wireless networks.

The latest report follows SpaceX's acquisition of low-band spectrum in recent weeks, another step towards establishing a nationwide wireless business. The spectrum purchase had already triggered sharp losses in US telecom shares, sending AT&T and Verizon to their worst single-day declines in more than two decades.

Securing access to cellular sites would address another critical requirement for SpaceX: the physical infrastructure needed to deliver terrestrial mobile coverage at scale.

SpaceX's Starlink satellite service has established a revenue-generating business providing internet connectivity, particularly in rural and sparsely populated areas where conventional broadband infrastructure can be expensive to deploy. However, satellite connectivity and a nationwide terrestrial mobile network are not interchangeable. Competing directly with major wireless carriers would require a broader network architecture, sufficient spectrum capacity, and extensive infrastructure to support reliable service across populated areas.

Access to tens of thousands of cellular sites could help SpaceX accelerate that process by reducing the need to build every part of its network independently. But securing sites would not, by itself, establish that the company could reproduce the coverage, capacity and service quality offered by incumbent operators. The scale of the reported requirement also points to the magnitude of the undertaking.

The company's strategy could also reshape its relationship with existing telecom operators. Bernstein analysts said a mobile virtual network operator, or MVNO, arrangement with SpaceX might not appeal to incumbent carriers. Under such an arrangement, a new provider typically sells wireless services using another operator's network rather than owning the entire infrastructure itself.

For established carriers, an agreement could provide an additional source of revenue while allowing SpaceX to enter the market more quickly. However, it could also help a potential rival build a customer base before developing an independent network. That tension may make cooperation difficult, particularly if carriers believe they would be helping create a competitor.

Bernstein analysts added that a unified stance among telecom operators against such an arrangement had done little to improve investor sentiment, leaving companies to reassess their options as SpaceX advances its plans.

The market reaction was not uniformly negative across the telecommunications industry. Shares in Crown Castle, one of the infrastructure companies identified in the report as being in discussions with SpaceX, surged 11.6%.

American Tower rose 4.9%, while SBA Communications gained 4.6%. SpaceX shares increased 1.7%.

The divergence illustrates the different financial implications of SpaceX's expansion for wireless carriers and infrastructure owners. Established operators risk losing customers, pricing power, or future growth opportunities if a well-funded entrant builds a credible alternative. Tower companies, by contrast, could benefit from additional demand for access to their existing assets.

But if SpaceX leases sites from tower operators, the agreements could create a new source of recurring revenue without requiring infrastructure owners to finance the entire wireless network themselves.