- SpaceX may be eyeing a direct-to-consumer Starlink mobile service that circumvents existing U.S. mobile operators
- SpaceX President and COO Gwynne Shotwell reportedly talked about it during the IPO road show
- The report follows speculation about what exactly Elon Musk plans to do in the U.S. mobile market: build, buy or do an MVNO
SpaceX told investors that it plans to launch a new Starlink mobile service for U.S. mobile consumers that would put it in direct competition with AT&T, T-Mobile and Verizon, according to a report by the Financial Times (FT) on Friday.
SpaceX President and COO Gwynne Shotwell told investors during the recent IPO roadshow that they were considering launching a Starlink retail product and could build its own terrestrial U.S. mobile network, the FT reported, citing four people familiar with the matter.
So far, SpaceX's mobile moves have been more about partnering with mobile operators, including T-Mobile in the U.S. for its T-Satellite service.
But the report isn’t exactly coming out of left field. The wireless industry has been buzzing about Elon Musk’s intentions for a long time, fueled by SpaceX’s IPO and the S-1 filing that states it will compete to be “the preferred connectivity experience” to customers no matter where they’re located – rural, suburban and urban areas.
Plus, SpaceX qualified to bid for spectrum licenses in the recently completed AWS-3 auction, fueling speculation it might try to build its own terrestrial network.
The Federal Communications Commission (FCC) announced the winners of that auction today. SpaceX bought two markets: Cincinnati for $8,406,000 and the Gulf of America for $84,200. (As expected, AT&T, Verizon and T-Mobile were the highest bidders, with Verizon being the biggest spender.)
SpaceX: Buy or build?
There’s also been speculation about Musk outright buying one of the nationwide wireless carriers.
Musk was asked about that last year during the All-In Summit, where he also said Starlink isn’t going to put other carriers out of business. “They’re still going to be around because they own a lot of spectrum,” he said.
Famous last words?
Starlink Mini form factor?
Tim Farrar, president of TMF Associates, said in a blog post today that it’s always been expected that there will be some kind of direct-to-consumer Starlink Mobile offering.
However, he said it’s most likely in the form of a smaller version of the Starlink Mini operating in mobile satellite services (MSS) frequencies – with a much improved battery life that connects to a phone via Bluetooth or Wi-Fi.
“That’s very different to offering a fully fledged mobile service, when satellite links won’t deliver the data rates and inbuilding penetration expected from a terrestrial network,” he said.
He referred to negotiations likely going on between SpaceX and T-Mobile regarding how much T-Mobile will pay for T-Satellite after its exclusivity ends next month. T-Mobile CEO Srini Gopalan has said the use of T-Satellite is about 0.0002% of its total network usage, proving that satellite direct-to-device is a “fundamentally complementary” category to regular terrestrial mobile service.
“Threats to buy a mobile operator or build a terrestrial mobile network seem like a paper tiger, which would do nothing to leverage SpaceX’s ‘core strengths’ as set out in the S-1,” Farrar said.
More will be known when SpaceX reports Starlink Mobile’s revenues for Q2 and Q3, indicating whether Starlink Mobile is really a growth engine for the company, he added.