While announcing its Q2 earnings report, the first since going public, Elon Musk-led SpaceX has revealed its plans of competing directly with the largest American mobile phone carriers by complementing its satellite-based internet service with land-based infrastructure.
Noting that the three biggest operators, AT&T, Verizon Communications and T-Mobile US, generate hundreds of billions of revenue per year, SpaceX President and COO Gwynne Shotwell, while presenting the earnings data, said, “I anticipate us being able to acquire quite a few of their customers, because I think our service will be better. I’m quite excited about Starlink Mobile going forward.”
After Shotwell’s comments, shares of AT&T, Verizon and T-Mobile each fell more than 4% in post-market trading.
SpaceX’s satellite internet business already beams data directly to mobile phones, shoring up service in so-called “dead zones” for existing ground-based networks. While adding land-based components, such as cell towers, would better position Starlink to compete with the big names of the American telecom sector, doing so will be costly. As per the analysts, constructing and operating nationwide networks will require billions of dollars in physical infrastructure, along with scarce government-regulated airwaves.
“We definitely intend to build out the terrestrial component. So you will have not only the capacity from the satellites themselves, but you will have a build-out of the hardware and systems necessary to make a true mobile service,” Shotwell remarked, while making the SpaceX’s telecom roadmap public.
SpaceX’s plans to lure customers away from longstanding operators will require a network of upgraded Starlink satellites. Along with this, it needs to acquire rights to more spectrum, the radio waves needed to beam coverage, and last but not the least; securing access to thousands of cell towers and small cell nodes. All of these could take years.
SpaceX most likely won’t have access to network rental partnerships, an indutsry practice under which companies including Charter Communications and Comcast Corp have become what’s known as mobile virtual network operators. The mobile carriers have already declared that they won’t give SpaceX access to their networks in an MVNO (Mobile Virtual Network Operator) capacity.
“Unless Starlink can secure an MVNO 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,” said Craig Moffett of MoffettNathanson, while interacting with the Reuters.
An MVNO provides wireless service without owning a nationwide cellular network. Instead, it leases network capacity from an existing carrier and sells service under own brand.
The companies, as part of the defensive move against the Musk-led venture, have already announced a rare three-way joint venture that aims to make satellite capabilities more readily available to mobile phone customers.
To deal with this, SpaceX has adopted a creative path. As per the reports, in July, it held talks with Charter about running some of its phone traffic through the largest home-internet provider’s ground-based infrastructure.
Also not to forget SpaceX’s strategic acquisition of 65 megahertz of wireless spectrum licenses from EchoStar for a total of USD 19.6 billion through two deals announced in 2025, that gave Starlink airwaves to expand into mobile services.
“The spectrum that we purchased from EchoStar does have terrestrial components, so we definitely intend to build out terrestrial,” Shotwell said.
Shotwell said the company will build the infrastructure needed to make Starlink “a true mobile service” and expects to win “quite a few” customers from the “Big Three” wireless carriers.
SpaceX, as per the reports, intends to disrupt the American telecom industry by pairing its satellite network with ground-based infrastructure to offer a broader wireless service, moving beyond the current direct-to-device service for areas without cellular coverage.
Starlink and SpaceX’s broader connectivity operations remain the company’s primary financial engine, underpinning Musk’s expensive push into AI, data centers and next-generation rockets.
“It makes no sense for SpaceX to try to replicate what terrestrial players have built over 30 years with 1000 MHz between them, with 65 MHz,” said David Barden from New Street Research.
A section of the investors still sees market underestimating the potential disruption.
“I definitely think what Elon said on the call about investors undervaluing that side of the business is absolutely correct in my mind,” said David Wagner, portfolio manager at Aptus Capital Advisors.
For Wagner, SpaceX’s willingness to innovate, along with Musk’s high-risk appetite, may end up disrupting the market beyond the imagination of the so-called “Big Three.”
Under its partnership with T-Mobile, SpaceX uses Starlink satellites to provide direct-to-cell connectivity for compatible smartphones outside traditional cellular coverage, complementing rather than competing with the carrier’s network.