Telstra Group Ltd (ASX: TLS) shares aren't joining in the broader market rally today.
Shares in the S&P/ASX 200 Index (ASX: XJO) telco provider closed on Friday trading for $5.20. During the Monday lunch hour, shares are changing hands for $5.13 apiece, down 1.4%.
For some context, the ASX 200 is up 1.3% today following news that the US and Iran have inked a peace deal.
Taking a step back, Telstra shares have gained 4.9% over the past year, just edging out the 4.3% one-year gains posted by the benchmark index.
Atop those capital gains, Telstra stock also trades on a fully-franked 3.9% trailing dividend yield.
But could Elon Musk's newly listed Space Exploration Technologies Corp (NASDAQ: SPCX) juggernaut take a bite out of Telstra's lunch?
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Why Telstra's shares could come under competitive pressure
Telstra shares may be underperforming today amid investor concerns that Starlink, a SpaceX subsidiary, could compete with the ASX 200 telco via its satellite-based internet services.
As you're likely aware, SpaceX listed on the NASDAQ on Friday in a record-breaking US$75 billion initial public offering (IPO), with significant success.
The SpaceX share price closed the day up 19.2%, giving the company an eye-popping market cap of US$2.1 trillion. And this has seen founder Elon Musk take the crown as the world's first trillionaire (in US dollars).
To give you some idea of the potential threat SpaceX poses to global telcos, Starlink serves 10.3 million subscribers in 164 countries. And Starlink reported US$11.4 billion in revenue from its connectivity segment in 2025, bringing in US$4.4 billion in operating income.
What are the experts saying about the competition from Musk's SpaceX?
As The Australian Financial Review reports, investor concerns over the SpaceX impact on global telcos are partly fuelled by Oppenheimer, with the broker cautioning that US telcos will face competitive pressures from Starlink.
However, Barrenjoey analyst Eric Choi expects that Telstra shares are likely to be less impacted.
"There is a long-term risk that Optus and Vodafone use satellite to close some of the coverage differential to Telstra," he said.
But Choi noted that the "quality and reliability of the Telstra network, the strength of the brand and Telstra's regional points of presence" should help support the stock.
Sean Sequeira, Chief Investment Officer at Australian Eagle Asset Management, also pointed to the ASX 200 telco's high-quality offerings as likely to help fend off any potential competition from Musk's SpaceX.
"Historically, customers have not left Telstra because it has a superior network despite being more expensive," Sequeira said (quoted by the AFR). "It would take a significant event for clients to move en masse."
And Telstra is already working with Musk's Starlink.
Choi noted:
We estimate Telstra pays Starlink $50 million to $100 million per annum today, and Starlink utilises Telstra's spectrum to offer SMS in remote areas. Optus also has a partnership with Starlink but is yet to launch direct-to-device.
