SpaceX weighs US Starlink mobile service for consumers
SpaceX has discussed selling Starlink mobile plans directly to US consumers, a shift that could put it against Verizon, AT&T and T-Mobile.
By Hana Yoshida · Markets Reporter
3 min read
SpaceX is considering a Starlink mobile service sold directly to US consumers, a move that could push the satellite company into head-to-head competition with the country’s largest wireless carriers. The Financial Times reported that SpaceX president and chief operating officer Gwynne Shotwell described the idea to investors during a recent IPO roadshow, citing four people familiar with the discussions.
The plan would mark a major expansion of Starlink beyond satellite broadband and wholesale-style partnerships with telecom companies. According to the Financial Times, SpaceX has also considered building a terrestrial mobile network in the United States, which would require retail contracts, customer support and network infrastructure.
Starlink’s US mobile work has so far been more limited. The Financial Times reported that SpaceX has preferred to work with carriers such as T-Mobile, giving them access to Starlink satellites to help fill coverage gaps, especially in rural areas.
The commercial terms of those carrier agreements have not been made public. Analysts cited by the Financial Times believe SpaceX receives a share of revenue from mobile customers whose plans include satellite connectivity.
A larger market than satellite broadband
A retail Starlink mobile product would put SpaceX in direct competition with Verizon Wireless, AT&T and T-Mobile, the three dominant US mobile network operators. It would also give SpaceX a path into a broader consumer market than satellite internet service alone.
Starlink already provides high-speed internet service through its satellite constellation in more than 150 countries, according to the Financial Times. The company had 10.3 million broadband customers worldwide as of March, the report said.
SpaceX did not respond to a Financial Times request for comment. The company has described Starlink expansion as a growth area in IPO materials, according to the report, but has not publicly confirmed plans for a US retail mobile service.
The discussions follow SpaceX’s initial public offering, which the Financial Times said has increased investor pressure for continued rapid growth and new revenue streams. During the IPO roadshow, Elon Musk also presented investors with plans involving space-based data centers and a Mars settlement, according to the report.
Goldman analysts, whose firm was a lead underwriter, have forecast that SpaceX’s AI revenue could rise 100-fold to $322 billion by 2030, the Financial Times reported.
Spectrum limits remain a challenge
Speculation about SpaceX’s mobile ambitions increased after the company agreed last September to pay $17 billion to EchoStar for wireless spectrum licenses, according to the Financial Times. Many analysts saw that purchase as a possible step toward a consumer mobile business.
A SpaceX bond prospectus reviewed by the Financial Times said Starlink Mobile was expected at first to have the greatest effect for customers in remote areas without terrestrial mobile coverage. The same document pointed to broader goals as the system improves and the satellite constellation expands, saying SpaceX would seek to compete for customers in rural, suburban and urban areas.
Analysts have also warned that a retail mobile push would be costly and difficult. New Street Research estimated that Verizon, AT&T and T-Mobile together control about 1,020MHz of spectrum, compared with 65MHz for SpaceX.
David Barden, a partner at New Street Research, told the Financial Times that building a wireless network in saturated markets worldwide would be extremely difficult. He added that raising the prospect could help SpaceX seek better revenue-sharing terms with mobile network partners.
This story draws on original reporting from Ars Technica.