SpaceX says it will directly compete with US mobile giants

SpaceX executives have said the company intends to develop a mobile service that will directly compete with the three largest US wireless carriers. Previously, SpaceX had partnered with traditional carriers to fill coverage gaps using satellite capacity. But after acquiring spectrum licenses from EchoStar, the company now plans to build its own ground-based infrastructure as well.

During an earnings call, SpaceX President Gwynne Shotwell said the purchased spectrum includes terrestrial rights, so the company will definitely build out that component. She noted that AT&T, Verizon, and T-Mobile together generate about $600 billion in annual revenue, and predicted that SpaceX will attract a significant number of their customers because its service will be better—eliminating dead zones and functioning reliably during natural disasters.

The company does not intend to erect large cell towers. Instead, it plans to deploy small femtocells attached to Starlink dishes. Elon Musk suggested that home and business Starlink antennas could double as cellular base stations, providing direct connectivity to phones on the ground with what he believes is higher bandwidth than current cellular networks.

Industry analysts remain skeptical. SpaceX is acquiring 65 MHz of nationwide spectrum, while the major carriers together hold roughly 1.1 GHz. Telecom analyst Craig Moffett told Reuters that without a mobile virtual network operator agreement with one of the carriers, it is extremely challenging to see Starlink’s direct-to-consumer service becoming competitive within five years. David Barden of New Street Research similarly said that 65 MHz is insufficient to replicate what terrestrial players built over 30 years with 1,000 MHz.

SpaceX is likely to seek more spectrum, possibly by buying competitors or participating in a government auction next year. The company currently has about 650 Direct to Cell satellites in orbit and has asked the FCC for permission to launch up to 15,000 next-generation mobile satellites. In a filing with the Canadian government, SpaceX said service with the new satellites would begin by late 2027, with thousands deployed by the end of 2028.

Shotwell said the current Starlink Mobile system operates with 5 MHz through carrier partnerships, and the additional 65 MHz from EchoStar will provide a massive increase in capability. Combined with new satellites, she said the system will be about 100 times better than today. She declined to disclose the cost of the terrestrial network, but argued it would be capital-efficient because small cells can be deployed as needed.

Investors reacted quickly: SpaceX’s stock dropped sharply after the company reported nearly $16 billion in capital expenditures on AI, and shares of the three major carriers also fell following the announcement.