A few weeks ago, SpaceX signaled interest in building its own terrestrial wireless network. The move jolted the communications sector and raised a simple question: does SpaceX really plan to enter a mature, fiercely competitive market, or is something else at work? Building a fourth, nationwide U.S. wireless network would require massive time, capital and execution, while other routes may be more practical. Until the overall picture is clearer, it may be worth pausing before casting SpaceX as the next major U.S. wireless powerhouse.
SpaceX has undeniably transformed space launch and built a fast-growing satellite broadband business. Its Low Earth Orbit (LEO) constellation has changed the game: faster broadband speeds, quicker satellite upgrades and stronger U.S. leadership in a strategically important global market — a position U.S. officials have no desire to surrender. That leadership matters. It supports economic productivity, fuels innovation and extends connectivity to rural and hard-to-reach communities where traditional providers are sometimes limited or cost-inhibited. Capacity questions remain in some cases, but next-generation satellites should ease them.
Still, a satellite constellation is not a terrestrial wireless network. The barriers are distinct and hard to minimize. Sprint’s experience showed how difficult it can be to secure key spectrum licenses. SpaceX would need more licenses — and more varied licenses — than it currently holds. Only so much spectrum will be available through auction or secondary-market sellers, and it will be expensive. Incumbent wireless competitors will have little reason to make the path easier. If the traditional satellite industry was caught off guard by SpaceX’s rise, the leading U.S. wireless providers are not.
Likewise, government officials seemed frustrated with and dissatisfied by Dish’s recent wireless buildout efforts before yanking the rug. Notably, the company’s business model shifted from a straightforward retail offering toward a wholesale or network-device strategy, apparently in response to market demand. Would Musk want to arrive late to a similarly situated market? Company officials also dispute the scale of capital required, but a Bernstein estimate suggests the effort could consume $70 billion to $130 billion that might otherwise be deployed elsewhere. Are narrowing wireless margins enough to justify that bet?
Beyond spectrum and capital, SpaceX likely would need carriage on tens of thousands of towers, a mass-market distribution operation far beyond its broadband base, relationships with device manufacturers, integration of previously purchased spectrum bands, and readiness for extensive government obligations. That is not a punch list; it is a mountain range.
The most intriguing and perhaps technically suspect component of SpaceX’s plan is its possible reliance, to some degree, on femtocells to connect terrestrial wireless users. In plain terms, SpaceX would use existing Starlink receiver dishes as a kind of micro-tower network, moving terrestrial wireless traffic among users. Wireless experts appear highly skeptical that this can work at scale, especially given limits imposed by physics. SpaceX would need to solve any interference issues, while persuading customers to allow this use and connecting the devices into a unified network. Would the economics even work? Others are deploying similar models, but not at anything close to the size SpaceX would need, and not with a major company’s reputation on the line.
It is not irrational to ask whether this entire effort is part of a broader strategy that does not require building a wireless network. Head fakes are not uncommon in the business world. Press reports have described at least four or five alternative paths for a terrestrial wireless play, and the company appears to have explored some of them with market participants. Is this partly a way to secure better pricing from an existing provider? Or is SpaceX positioning itself to buy a nationwide company instead? Certainly, any type of network build could become an unnecessary distraction from SpaceX’s central role in satellites, AI and other next-frontier technologies.
For years, the communications industry has watched SpaceX reshape the satellite market with curiosity and respect. But that does not make a terrestrial wireless build any less difficult. Given alternative market-entry options and SpaceX’s appetite for grander projects, a wireless network play seems less than certain.
Michael O’Rielly is currently President at MPORielly Consulting Inc., President and CEO at the Media Institute, Visiting Fellow at the Hudson Institute, Adjunct Senior Fellow at the Free State Foundation, Special Advisor with Crest Hill Advisors, and Member of the International Advisory Council of APCO Worldwide. He served as a Commissioner at the Federal Communications Commission from 2013 through 2020. Before joining the FCC, Mr. O’Rielly held leading staff positions during 20 years on Capitol Hill in both the U.S. Senate and House of Representatives, ending as Policy Advisor in the Office of the Senate Republican Whip.
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