Space X claims Starlink Mobile will be better than AT&T, T-Mobile, and Verizon - Ars Technica

Overview

Space X claims Starlink Mobile will be better than AT&T, T-Mobile, and Verizon

Space X won’t build large cell towers but plans small base stations across US.

Details

Space X says it has a plan for Starlink Mobile to compete against the big three wireless carriers and take a large number of customers away from them.

Space X has so far partnered with traditional mobile carriers to supplement their ground-based networks with Starlink satellite capacity, mainly to ensure coverage from space in dead zones not reached by cell towers. But Space X is buying spectrum licenses that would let it offer its own terrestrial service to compete directly against the big carriers, and the firm’s top executives said in yesterday’s earnings call they plan to do just that.

“The spectrum that we purchased from Echo Star does have terrestrial components, so we definitely intend to build out the terrestrial component,” Space X President Gwynne Shotwell said in response to questions on the earnings call. “So you will have not only the capacity from the satellites themselves, but you will have a buildout of the terrestrial, basically the hardware and systems necessary to make a true mobile service exactly what you want it to be.”

Shotwell said that AT&T, Verizon, and T-Mobile make roughly $600 billion a year combined, “and I anticipate us to be able to acquire quite a few of their customers because I think our service will be better. We will eliminate dead zones, leveraging the, basically the satellites in orbit. It will be better during any sort of natural disaster.” Describing plans for next-generation Starlink mobile satellites, Shotwell said that Space X “will start to fly the satellites next year, and we will start providing service end of next year.”

Starlink plans small base stations instead of big towers

As we’ve written before, there are technical challenges for Space X to compete against major carriers instead of merely partnering with them. AT&T, T-Mobile, and Verizon have more spectrum than Space X, cell towers throughout the US, and long track records of providing nationwide mobile service.

“Unless Starlink can secure an MVNO (Mobile Virtual Network Operator) agreement from one of the carriers, which would provide a baseline ‌of ⁠coverage, 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,” telecom analyst Craig Moffett said, according to Reuters.

T-Mobile has already partnered with Space X, while AT&T and Verizon have deals with satellite company AST Space Mobile. But all three big carriers seem to want non-Space X satellite providers to help fill in dead spots in their networks. AT&T, T-Mobile, and Verizon recently announced a joint venture to pool spectrum “and help satellite providers reach more customers through a unified platform.”

Shotwell and Space X CEO Elon Musk indicated the firm won’t build large cell towers. Instead, the terrestrial component will consist of “little femtocells around the country,” Shotwell said. She said the plan is to put “a cellular base station on the, basically, the gear that holds a Starlink broadband dish.”

Musk seemed to indicate that future Starlink dishes used by homes and businesses could double as cellular base stations. “Instead of having to deploy these very expensive and difficult-to-locate large cellular base stations, we feel reasonably confident that we can deploy a large number of sort of small stations,” he said. “Essentially, they’re really just Starlink dishes that also provide connectivity in the mobile spectrum bands, and have them be all over the place.”

Musk said, “Starlink antennas are located on the roofs of houses and businesses. They’ve got a clear view for providing connectivity directly to cellphones on the ground, and in fact, providing connectivity that is, we think, probably better and higher bandwidth than what is currently available from cellular providers.”

Space X is buying 65 MHz of nationwide spectrum licenses from Echo Star in a few chunks between 1.695 GHz and 2.2 GHz. Echo Star’s 2 GHz spectrum licenses include rights for both terrestrial and satellite deployments, Space X has said.

While the FCC approved the deal in May, the transaction requires regulatory approvals from outside the US and is scheduled to be completed by November 30, 2027. Space X has said it will have access to the spectrum before that time because the licenses will be temporarily transferred to a trust held for the benefit of Space X.

Nationwide, approximately 1.1 GHz of licensed spectrum was allocated to mobile operators at the beginning of last year, wireless lobby group CTIA said in a January 2025 report. “It makes no sense for ⁠Space X to try to replicate what terrestrial players have built over 30 years with 1,000 MHz between them, with 65 MHz,” New Street Research analyst David Barden said, according to Reuters.

Space X probably isn’t done acquiring spectrum licenses. A Semafor report said Space X “has been hunting for spectrum that works well in cities and dense areas,” and “is considering buying competitors to acquire the spectrum or competing at a government auction set for next year.”

Starlink will be able to offer service from both the ground and space, but that won’t necessarily give it as much capacity as the major mobile carriers. Starlink satellite capacity limits have always been evident in its home Internet service, with the company charging higher prices in congested areas and imposing “demand surcharges” of up to $1,500.

Starlink deployed about 650 Direct to Cell (D2C) satellites under existing authorizations and is seeking FCC approval to launch up to 15,000 next-generation mobile satellites. Space X told the Canadian government in a filing that it “will begin launching its next-generation Starlink direct-to-device satellites with service beginning by late 2027,” and launch thousands of these upgraded cellular satellites by the end of 2028.

Shotwell said the current Starlink Mobile system uses 5 MHz through partnerships with telco providers and that the 65 MHz from Echo Star will provide a “massive increase in capability.” When added together, the boosts in spectrum and satellite capabilities will make the system about 100 times better than it is now, she said.

How much it will all cost is a concern for investors. Space X’s stock price dropped sharply today “after it reported capital expenditure of almost $16 billion on AI, double the previous quarter and well above Wall Street’s expectation,” the Financial Times reported. Building a cellular network will also be expensive, and Shotwell declined to say how much Space X will spend on its terrestrial network.

“You can have kind of these little femtocells around the country and you deploy that as you need it,” she said. “You don’t have to necessarily spend many billions of dollars in low-band spectrum all upfront before you deploy your system. So that’s why I don’t want to talk about the Cap Ex for building out the terrestrial, because we have a lot of really kind of great and new ideas for how we’re going to do that, and I think it will be quite Cap Ex-efficient.”

Even if Starlink never becomes a fourth major carrier alongside AT&T, T-Mobile, and Verizon, it could still take a big enough chunk of the mobile market to pose a problem for the big three. The three major carriers’ stock prices fell today after Space X announced its intention to compete more directly against them.

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Key Takeaways

• Space X claims Starlink Mobile will be better than AT&T, T-Mobile, and Verizon

• Space X won’t build large cell towers but plans small base stations across US

• Space X says it has a plan for Starlink Mobile to compete against the big three wireless carriers and take a large number of customers away from them

• Space X has so far partnered with traditional mobile carriers to supplement their ground-based networks with Starlink satellite capacity, mainly to ensure coverage from space in dead zones not reached by cell towers

• “The spectrum that we purchased from Echo Star does have terrestrial components, so we definitely intend to build out the terrestrial component,” Space X President Gwynne Shotwell said in response to questions on the earnings call