Cellular providers putting on a brave face, but SpaceX is keeping them up at night

It's scary season for the Big Three.

big three cellular carriers scared of spaceX
SpaceX has lit a fuse in the industry. | Image by SpaceX
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SpaceX's cellular network feels much closer to reality than it did when initial rumors surfaced.

The major providers have gone from denial to accepting that SpaceX isn't going to back down from its goal. They are still downplaying the threat, saying SpaceX lacks the capital/experience/infrastructure, or that Starlink Mobile will simply take too long to get off the ground.

Deep down, though, they are apparently aware that SpaceX's Starlink Mobile could emerge as a formidable rival, one that may change the very definition of a telecom company.

Freaking out



Commentator Sawyer Merritt got a tip from an insider with ties to a lobbyist for one of the Big Three carriers. The companies are allegedly having a meltdown over SpaceX and the potential impact of its wireless unit.

The incumbents are dealing with this just as you'd imagine a triumvirate would: by colluding to slow SpaceX down.

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Understandable


The telecom industry is fiercely competitive and operates on thin profit margins. That's apparently why the major providers avoid price wars. However, a fourth rival could upend the industry and lead to lower prices. While SpaceX's entry into the market looks inevitable, delaying its arrival could buy providers time build customer loyalty and develop a technological edge to neutralize the threat.

Interesting times


SpaceX is sending mixed signals. It might get its hands on EchoStar's abandoned network gear, or it might scoop up an MVNO like Boost Mobile to get a head start.

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CEO Elon Musk expects the service to launch in the next two to three years, though others predict it might take a little longer. Another possibility that has been floated is that SpaceX is trying to drive down telecom stock prices so it can eventually buy one of the Big Three. Or he may still be fishing for an MVNO agreement with one of the legacy carriers.

Either way, even if SpaceX is moving fast, it could be a while before something concrete takes shape.

Not to be dismissed



While catching up to the Big Three might be challenging, SpaceX is certainly not buying spectrum, negotiating with tower companies, and eyeing EchoStar's assets for nothing.

Regardless of how you feel about Musk's politics, he has consistently proven critics wrong. I don't see why it would be different this time.

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