TECH

Starlink plans to enter the US mobile market, unsettling major carriers

SpaceX has detailed new plans to transform Starlink Mobile into a hybrid solution that combines its satellite network with its own terrestrial infrastructure. This strategy could place Elon Musk’s company in direct competition with the largest mobile carriers in the United States.

According to statements by President Gwynne Shotwell, cited by PCMag, the company intends to build the terrestrial infrastructure needed to turn the service into a true mobile offering, complementing satellite capacity with ground-based hardware and systems.

The executive explained that SpaceX could keep costs low by using the same equipment that supports Starlink antennas, allowing for the installation of small base stations on existing structures. In doing so, it aims to create a nationwide network of mini mobile base stations without requiring massive investment in low-band spectrum prior to the system's rollout.

The technical approach avoids traditional large cell towers in favor of distributed femtocells. Engineers plan to mount these small cellular base stations directly onto the gear that holds standard SpaceX Starlink broadband dishes. CEO Elon Musk noted that this decentralized configuration provides clear sightlines to ground-based cellphones. The system leverages the existing roof mounts on homes and businesses across the country. Musk anticipates this ubiquitous deployment will deliver higher bandwidth than currently available from traditional cellular providers.

Entering the telecommunications space puts SpaceX in direct conflict with legacy wireless giants. The domestic mobile market generates an estimated $600 billion annually. AT&T, Verizon and T-Mobile currently dominate this highly lucrative telecommunications sector. Shotwell expressed absolute confidence in acquiring a massive segment of their customer base by offering a vastly superior standalone product. The upcoming infrastructure upgrades the existing direct-to-device feature known as Starlink Mobile. This legacy service currently acts as a supplementary layer for major carriers by providing basic text messaging and emergency data strictly in rural cellular dead zones.

The enhanced communications network will operate as a hybrid system integrating new terrestrial hardware with next-generation Starlink V2 satellites. These advanced orbital units will begin launching next year to provide the massive bandwidth capacity required for continuous nationwide coverage. Shotwell indicated the upgraded system will perform significantly better than the current low-bandwidth safety net offering. This aggressive shift from a supplementary rural coverage tool to a primary cellular carrier marks a massive strategic pivot for the corporation. Executives view this hybrid connectivity model as the next logical step to capture a dominant market position in consumer telecommunications.

Starlink Mobile already operates in partnership with T-Mobile using over 600 first-generation satellites, providing connectivity in areas lacking traditional coverage. However, SpaceX is preparing for a significant expansion with a constellation of 15,000 V2 satellites—promising 5G-like speeds of around 150 Mbps per user—with launches scheduled for next year and service expected to begin in late 2027.

Although the company has stated it intends to collaborate with mobile carriers, there are signs it might also sell the service directly to consumers, positioning itself as a potential fourth major carrier in the US market. Regulatory filings with the FCC indicate that SpaceX could deploy terrestrial systems in the country, creating a hybrid network after acquiring spectrum from EchoStar.

SpaceX’s ambitions had an immediate impact on Wall Street. Shares of Verizon, AT&T, and T-Mobile fell between 2.2% and 4% after the company revealed plans to build out terrestrial mobile services, signaling that investors view the initiative as a potential threat to the dominance of traditional carriers. Reuters reports that SpaceX acquired 65 MHz of spectrum licenses from EchoStar for $19.6 billion, securing the frequencies needed to expand Starlink into full mobile services.

Gwynne Shotwell emphasized that the company expects to win over many customers from the three major carriers, stating that the service will be superior and eliminate coverage gaps by leveraging its orbiting satellite network.

Despite the enthusiasm, analysts warn that transforming Starlink into a national mobile carrier will require years of investment and execution. The three largest U.S. carriers have invested hundreds of billions of dollars over three decades in spectrum licenses, network construction and upgrades, and strategies to attract and retain customers—advantages that would be difficult to match quickly.

Craig Moffett of MoffettNathanson stated that, without an MVNO agreement to guarantee basic coverage, it is extremely difficult to envision Starlink competing directly with carrier services in the next five years. This is because an MVNO relies on leased capacity from an existing network.

Other analysts suggest that acquiring a smaller carrier or assets—including spectrum, towers, and customers—would be the fastest route for SpaceX, similar to its purchase from EchoStar. However, they consider it unlikely that carriers would lease capacity to an emerging competitor. SpaceX claims to have “fresh ideas” for efficiently building out mobile infrastructure, avoiding the need to replicate what terrestrial carriers have developed over 30 years using far more spectrum than the 65 MHz the company currently holds.

Some investors believe the market may be underestimating SpaceX’s disruptive potential, highlighting its capacity for innovation as a factor that could put pressure on traditional carriers. The existing partnership with T-Mobile demonstrates that SpaceX can already complement terrestrial networks by providing direct connectivity to compatible smartphones outside standard mobile coverage areas, acting as an extension of the carrier's network rather than a direct competitor at this stage.

mundophone