Analysis:SpaceX’s spectrum deal still leaves it far from rivaling telecom giants
FILE PHOTO: The SpaceX logo in this illustration taken June 11, 2026. REUTERS/Dado Ruvic/Illustration//File Photo
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Oct 16 : SpaceX called its recent multibillion-dollar purchase of US airwaves a critical step towards building a mobile network, but constructing a true rival to major American carriers will require a terrestrial network and likely years of work and billions more.
Starlink became a money maker by offering internet service in rural and sparsely populated areas, where it faced little competition, as well as changing to easy-to-set-up home packages at a competitive price. Mobile will be harder.
Cities are particularly tough places for mobile telephony and are technologically challenging for mobile-to-satellite connections.
The rocket and satellite company will likely need to invest heavily in ground infrastructure, customer service, handset subsidies and promotions — costly parts of the wireless business in which AT&T, Verizon and T-Mobile already have extensive operations.
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Building a network would cost more than $80 billion, according to TD Cowen, and add to SpaceX’s capital demands as it pours money into its Starship rocket program, AI infrastructure, and Terafab chip factory.
“It’s just hard to imagine that this is all going to get done within a decade,” said Julie Zhu, a research analyst at MoffettNathanson. “In the decade or so leading up to 2023, the big three spent about $650 billion in capex to build in networks that ostensibly were already finished.”
Most phones have small antennas and limited transmitting power that make reliable satellite connections more challenging because satellites orbit hundreds of kilometers above Earth, much farther away than cell towers.
“There are too many pitfalls for satellite to be the only source of data,” said Anshel Sag, principal analyst at Moor Insights & Strategy.
SPACEX PUBLISHES HYBRID SPACE-TERRESTRIAL PLAN
SpaceX has called the latest deal, in which it acquired 800 MHz spectrum licenses from Grain at a price a source pegged at nearly $8 billion, a “critical next step” for the nascent Starlink Mobile to provide high-speed mobile service.
“Starlink Mobile will deploy a flexible architecture combining our satellite-to-mobile constellation in space with an advanced terrestrial deployment that can seamlessly connect devices everywhere,” including “indoors, outdoors, in cellular dead zones, and everywhere in between”, SpaceX said, announcing the purchase.
SpaceX has received regulatory authorization for up to 15,000 Starlink Mobile satellites and plans to deploy traditional terrestrial infrastructure such as antennas on towers and rooftops — a hybrid approach rather than pure satellite-to-phone — it laid out in a regulatory filing made public last week.
In a Starlink Mobile system, satellites could connect directly to mobile phones and indirectly by relaying signals through ground infrastructure. This is similar to the technology of a partnership between Starlink and T-Mobile, which provides the terrestrial network while Starlink supplies the satellite connectivity that fills in where there are no towers. That is a T-Mobile-branded service.
SpaceX in theory could strike a deal with one of the big three companies to use its ground infrastructure, what is known as a mobile virtual network operator, or MVNO, arrangement. However, SpaceX “appear to be going after a more build-your-own approach to a terrestrial network since nobody will offer them wholesale MVNO,” Sag said.
SpaceX would need several times more spectrum to match the holdings of the three big mobile companies, although current spectrum might be enough to start. “It is for a company with zero mobile subscribers, plenty of runway, and a robust device/equipment ecosystem,” TD Cowen said.
Would-be rivals dismissed the idea that the effort was an imminent threat.
T-Mobile Chief Technology Officer John Saw said SpaceX’s spectrum would not be enough to match the capacity and performance of established mobile networks, while Katie Magnotta, Verizon’s associate vice president of corporate communications, said, “A company can have billions of dollars of spectrum, but if they do not have the network to use it, it’s just empty airwaves.”
Source: Reuters
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