SpaceX (NASDAQ:SPCX) President Gwynne Shotwell said on Tuesday’s earnings call that Starlink Mobile will begin service at the end of 2027, and that she expects to acquire “quite a few” customers from AT&T Inc. (NYSE:T), Verizon Communications (NYSE:VZ) and T-Mobile US (NASDAQ:TMUS).
Investors took notice, sending shares of all three carriers lower Wednesday after SpaceX detailed the plan.
The group rebounded Thursday, with T-Mobile gaining 3.75%, AT&T 2.82% and Verizon 1.12%.
T-Mobile CEO Srini Gopalan is not convinced.
He told the Financial Times the Starlink threat has been “exaggerated,” asking what customer problem a satellite carrier would actually solve. Satellites, he argued, will likely remain complementary to cellular networks.
Starlink Just Removed One Big Barrier
Starlink’s current direct-to-phone service runs on roughly 5 MHz of spectrum borrowed from partner telecoms.
That is set to change following the FCC’s approval of two SpaceX deals totaling $19.6 billion for 65 MHz of EchoStar spectrum, which includes terrestrial rights.
Combined with a planned tenfold increase in next-generation mobile satellites, Shotwell said the upgraded service could be roughly 100 times more capable than today’s offering.
But Satellites Alone Won’t Cut It
Satellites are great at covering sparsely populated areas, but dense capacity is harder.
Thousands of phones in one stadium or apartment block may be competing for the same satellite capacity, while ground networks can reuse the same spectrum across many small cells.
Satellite signals also have a harder time penetrating buildings.
Asked by an Evercore analyst whether becoming a true fourth carrier would require over $100 billion in capex, Shotwell said the company “definitely intend[s] to build out the terrestrial component.”
Musk’s Answer: Rooftop Base Stations, Not Towers
Rather than replicating the incumbents’ large tower sites, Shotwell described attaching small cellular base stations to the same mounts that hold Starlink broadband dishes, deploying femtocells only where demand requires.
Musk said the combination could deliver connectivity “probably better and higher bandwidth” than existing carriers.
Analysts remain skeptical. "It’s extraordinarily challenging to imagine a direct-to-consumer service from Starlink that could be competitive with carrier services in the next five years," Craig Moffett of MoffettNathanson told Reuters.
Traders Are Watching the Rockets
Prediction market traders are watching one piece of infrastructure needed to deliver Musk’s ambitions.
A Polymarket contract with more than $490,000 traded gives five to six successful Starship space-reaching launches a 55% chance for 2026, while the odds of fewer than five have climbed to 34%.
Musk told analysts he expects at least one flight a day within a year.
SPCX shares closed at $114.92 on Thursday, up 6.14%.
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