SpaceX confident it can steal customers from T-Mobile, Verizon, and AT&T
Starting late 2027, we could see SpaceX begin its attack against the US Big 3 carriers
SpaceX to take on the US Big 3 carriers next year | Image by PhoneArena
Rumors have been flying all over the place about SpaceX becoming a threat to T-Mobile, Verizon, and AT&T by offering direct-to-consumer mobile service. On Tuesday, company founder, CEO, and Chief Engineer Elon Musk revealed SpaceX's mobile plans during a conference call following SpaceX's Q2 earnings report, its first as a public company.
SpaceX can deploy 65 MHz of spectrum it purchased from EchoStar
Musk pointed out on the call that SpaceX has 65 MHz of spectrum available thanks to its purchase of these airwaves from EchoStar. Musk called it "a massive increase in capability." SpaceX's upgraded network will support "voice and video calls over Signal and WhatsApp," said the one-time trillionaire, whose net worth has taken a little drop to $700-$800 billion due to stock price declines in Tesla and SpaceX.
The spectrum that we purchased from EchoStar does have terrestrial components, so we definitely intend to build out the terrestrial component. You will have not only the capacity from the satellites themselves, but you will have a buildout of the terrestrial, basically the hardware and systems necessary to make a true mobile service exactly what you want it to be
Gwynne Shotwell, SpaceX President
Shotwell pointed out the advantages of using SpaceX's direct-to-consumer wireless service such as the elimination of dead zones. She pointed out that during times of natural disasters on Earth, space-based communications platforms will be less likely to be affected than traditional carriers.
SpaceX says when it expects to start service
The SpaceX president also said that the company will start to fly the necessary satellites next year. At the end of that year, the direct-to-consumer service is expected to launch. Shotwell also made it clear that SpaceX now has enough spectrum to carry out its plans.
If the CEOs of T-Mobile (Srini Gopalan), Verizon (Dan Schulman), and AT&T (John Stankey) weren't losing sleep before, they might be now after reading this. Shotwell made it crystal clear that SpaceX will be going after their customers. The executive first calculated that the Big 3 US carriers gross about $600 billion (the actual figure for 2025 was approximately $352.15 billion), and the SpaceX president said, "I anticipate us to be able to acquire quite a few of their customers, because I think our service will be better."
Musk talked about installing Starlink dishes all over the place. These will provide connectivity in the mobile spectrum bands. He added that Starlink antennas are on the roofs of houses and businesses providing a clear view for the servce to connect with cell phones directly on the ground. He went on to say that this connectivity will offer better and higher bandwidth than what is currently available from the US Big 3 wireless providers.
With Starlink, there are no dead zones blocking mobile connectivity. | Image by Starlink
The competition comes down to pricing
When you consider that Starlink's direct-to-device service is currently powered by only 5 MHz of spectrum, you have to think about how capable it will be when it puts that 65 MHz of spectrum it obtained from EchoStar to use. But consumers might not care if Starlink's wireless service has an edge in quality compared to their current wireless provider. Thus, it will probably all come down to pricing.
As long as their current wireless firm can connect them to loved ones (and to important numbers for business customers), many wireless subscribers will not have the incentive to make the switch to a new technology unless the pricing has them saving plenty of cash each month. With that in mind, SpaceX's pricing for a standalone mobile service could undercut the US Big 3 by taking advantage of the lower costs of running a satellite-based wireless network.
How will the Big 3 respond to a price war?
How would Verizon, T-Mobile, and AT&T respond to the opening salvos in a price war instigated by SpaceX? While your first reaction would probably suggest that they cut their prices to match the attack, I'm not so sure. I would expect that the US Big 3 might take a step back to see whether consumers are feeling comfortable using satellite service before they start cutting their prices.
It will be interesting to see how the carriers respond.
If you found this article interesting, we have others that you should read:
- Verizon denies plans to be bought out by SpaceX.
- SpaceX plans to be an MVNO.
- T-Mobile was in SpaceX's crosshairs.
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