The pitch that should worry America’s Big 3 wireless carriers didn’t come from a satellite. It came from a base station bolted to a Starlink dish on somebody’s roof.
SpaceX is preparing to build a terrestrial mobile network with the explicit goal of taking customers away from T-Mobile, AT&T and Verizon. That was the message from SpaceX president Gwynne Shotwell and CEO Elon Musk during the Q&A portion of the company’s first earnings call.
“I anticipate us to be able to acquire quite a few of their customers because I think our service will be better,” Shotwell said.
The EchoStar spectrum has a ground component, and SpaceX is going to use it
“The spectrum that we purchased from EchoStar does have terrestrial components, so we definitely intend to build out the terrestrial component,” Shotwell said. “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.”
That’s a different business from what SpaceX runs today. Its existing direct-to-device product, Starlink Mobile, is a supplement to carrier networks rather than a replacement for one. In the US it rides along with T-Mobile, handing you limited messaging and data when you’re standing in a cellular dead zone.
Shotwell said the service will be “100 times better” once it starts using the bandwidth acquired from EchoStar along with next-generation Starlink Mobile (V2) satellites that “will start flying next year.”
Sixty-five megahertz is not a national network
Here’s the part that doesn’t get solved by ambition. SpaceX acquired only 65 megahertz of spectrum from EchoStar, which pales in comparison to what each of the Big 3 holds in the US.
To cover the country, SpaceX either buys more spectrum or finds another way. Shotwell teased “great and new ideas” for building a ground network on the cheap, and then gave away the shape of the plan.
“Let me give a little hint. And that is you could put a base station, a cellular base station on the gear that holds a Starlink broadband dish. So you can have kind of these little femtocells around the country, and you deploy that as you need it.”
Musk’s version: skip the towers entirely
Musk jumped in to underline it.
“Yeah, that point is probably worth just a few more words, because this is quite an important point. 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 small stations. Essentially, they’re really just Starlink dishes that also provide connectivity in the mobile spectrum bands, and have them be all over the place.”
He kept going. “The Starlink antennas are located on the roofs of houses and businesses, so they’ve got sort of a clear view for providing connectivity directly to cellphones on the ground. Providing connectivity, that is, we think, probably better and higher bandwidth than what is currently available from cellular providers. This is an important point.”
Note the hedges in there. “Reasonably confident.” “We think, probably better.” Musk isn’t claiming this network exists. He’s claiming the company believes it can be built without the tower-siting fights and permitting slog that define carrier buildouts. Those are two different things, and the second one is where every would-be fourth carrier in US history has run aground.
The number Shotwell cares about is $600 billion
The US wireless market, dominated by AT&T, T-Mobile and Verizon, is worth around $600 billion annually according to Shotwell. SpaceX wants a slice of it.
None of this is a surprise to anyone who watched the run-up to the company’s IPO. The bigger ambitions were rumored then, with Shotwell telling investors of plans to sell mobile contracts directly to individuals in the US.
What changed is that it’s now on the record, on an earnings call, aimed by name at the three companies that currently take your monthly payment.
If you’re a T-Mobile customer, you’re already using a sliver of this. The dead-zone texting on your phone is SpaceX’s foot in the door, and the company just told investors it intends to walk through it and sell you the whole plan instead.
