- SpaceX should hold a longer session to explain how Starlink connectivity could bring in several hundred billion dollars a year, according to Elon Musk
- “You’re missing some of the pieces that we know about internally,” he said during the Q3 conference call
- Some analysts suspect the bigger prize for SpaceX isn't retail wireless but connectivity for physical AI, like cars and robots
A lot of people are still trying to get their heads around Starlink Mobile’s plan to build a terrestrial wireless network that competes with incumbent wireless carriers, which have undergone decades of consolidation and network buildouts to get where they are today.
Elon Musk’s suggestion: Give the SpaceX team a forum to communicate what they’re trying to do in a way that isn’t restrained by the parameters of a quarterly earnings call.
“I think we probably should do a longer presentation on the game plan for Starlink connectivity and why we think it will ultimately be a business that generates several hundred billion dollars in revenue a year because you are missing some of the pieces that we know about internally,” he said.
“We should probably describe that in more detail in a forum that's not limited to a few minutes at an earnings call,” he added.
His suggestion came near the end of Tuesday’s Q3 conference call where SpaceX laid out how it generated $14.6 billion in revenue in the quarter, up 161% from a year earlier. Starlink Mobile surpassed 22 million monthly users as of the end of the quarter, up 37% quarter-over-quarter.
From flying cars to mobile phones
During the Q&A portion – where one analyst prefaced his question with “thanks for making flying cars real” – Evercore ISI analyst Kutgun Maral asked Musk and his team to explain how SpaceX’s spectrum portfolio, recently beefed up with 800 MHz spectrum, will compete with U.S. incumbents.
SpaceX President and COO Gwynne Shotwell took a stab at answering the question before handing it over to Musk.
“Let me point out that the vast majority of mobile connectivity is actually Wi-Fi,” she said, noting it’s “something between 85% and 93%” that is done through Wi-Fi. “And keep in mind, Starlink Broadband does a lot of Wi-Fi work as well.”
As for SpaceX’s spectrum, she said the S-band spectrum will probably provide the majority of the connectivity.
“And then obviously, you need the low-band spectrum, the 800 MHz spectrum, to basically penetrate buildings, so if you're not on Wi-Fi, you can still receive the signal,” she said.
She reiterated what they talked about during the last conference call, which is to use homes and businesses where Starlink broadband is installed to act as network conduits. The word “femtocell” didn’t come up but was referenced in the August 4 Q2 earnings call.
Towers are also part of the equation. “It’s not just the spectrum that we've talked about with the S-Band. We will basically leverage the real estate from Starlink installs and other towers,” she said.
SpaceX’s plans beyond wireless retail
In prepared remarks, Shotwell noted how SpaceX received approval from the Federal Communications Commission (FCC) to launch 15,000 mobile V2 satellites and the 800 MHz spectrum purchase that will pave the way for Starlink Mobile to become a major mobile carrier in the U.S.
At one point, she also talked about internet traffic and expectations for the communications market to grow beyond human communication to connected cars, robots and “the adoption of Super Intelligence” to increase communication demands many orders of magnitudes.
Included in Evercore analyst Maral’s question was a reference to Starlink Mobile’s plans around delivering something more than a 5G-like experience: How much of the connectivity focus is on traditional retail wireless versus what might be a massive physical AI opportunity?
Other industry analysts have said they don’t think Musk’s ultimate motive is to be a national wireless carrier in the traditional sense but to use it as a means to power autonomous cars, robots and other, larger-than-your-typical-mobile-phone-service types of things.
That – as well as the whole building-a-terrestrial-network thing – might explain why it would take more than a few minutes during an earnings call to inform everyone.
“We definitely need to explain this in detail. Veterans of the cellular industry look at the chess board of existing pieces and don’t see a solution. They don’t understand that SpaceX is developing entirely new pieces that fundamentally alter the strategic landscape,” Musk said in response to a tweet suggesting the Starlink Mobile opportunity is underappreciated by the investment community.
Read more stories about SpaceX on Fierce Network:
SpaceX scores 15K-satellite win as FCC doubles down on D2D
SpaceX shares big plans for global broadband
SpaceX lays out plan to compete with Big 3 wireless carriers
Now SpaceX is talking to Charter about a mobile offer: report