Musk's mobile plan comes down to Earth with tower talk

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(Source: US Space Force/Alamy Stock Photo)

SpaceX says Starlink is going to be a "major mobile carrier" in the US. It's still unclear how it's going to do that with a hybrid satellite/terrestrial network, or why it wants to, even after management fielded equity analysts' questions during this week's earnings call. Elon Musk admitted he needs to explain the plan and suggested it is not understood because it so different from any traditional network play.

"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 posted on X.

Speaking on the investor call, he said the company should hold a longer presentation about the Starlink "game plan" and why he thinks the connectivity business will be generating $100 billion in revenue per year, at some unspecified point. "You are missing some of the pieces that we know about internally," he said.

Related:Musk, genius or lunatic, has no mobile answer in space or on land

Despite the cryptic messaging, Starlink's terrestrial mobile network looks to be taking a rather conventional approach.

SpaceX is reportedly in discussions with tower infrastructure companies in the US about getting access to 80,000 sites to build its terrestrial wireless network, according to Bloomberg. Such a footprint would be about the same size as the networks of AT&T, T-Mobile and Verizon.

The report namechecked Crown Castle as one of the towercos. Crown Castle CEO Christian Hillabrant said this week that the company was "talking to all of them" when asked whether discussions were already underway with SpaceX and other satellite players. He also said SpaceX's mobile ambitions could be a "catalyst" for the wireless infrastructure company.

According to a research note by New Street Research Analyst David Barden, SpaceX still says it still wants an MVNO deal with one of the US carriers, based on conversations with the company. A tower buildout and MVNO would not be "mutually exclusive," he noted, "but to what end?"

"As long-time fans of the tower sector, good news is always welcome, however we still would like to see Elon's presentation on SpaceX's mobile strategy before fully buying into the hype," he wrote.

Others speculate another route for Starlink's ground game would be to buy Dish's assets. Commenting on Bloomberg's report, TMF Associates analyst Tim Farrar posted on X: "Obviously the starting point will be the acquisition of Ergen's existing network, with those leases wrapped into the discussions with the tower companies."

Related:FCC OKs SpaceX to deploy 15K D2D satellites, and nine years to complete it

AI agents will need more bandwidth

Starlink gained FCC approval to deploy up to 15,000 "V2" satellites for direct-to-device services and is acquiring 14MHz of lowband 800MHz band spectrum from Grain Management. Together, this puts the company on a path to becoming "major mobile carrier in the US," said Gwynne Shotwell, president of SpaceX, speaking on the earnings call on Tuesday.

Critics say SpaceX's spectrum holdings, including the lowband spectrum, are not enough to match the big three carriers.

Shotwell said Starlink Mobile will mostly use S-band spectrum (from the EchoStar spectrum acquisition) and the lowband spectrum would support that to "penetrate buildings" for indoor coverage, while leveraging Starlink rooftop dishes and "other towers" for infrastructure. She also said Starlink Broadband will be in the mix since "the vast majority of mobile connectivity is actually WiFi."

She and Musk both hinted that Starlink will be connecting more than humans.

"Connecting cars, robots, and the adoption of super intelligence will increase communication demands not in percentages but in many orders of magnitudes," she said.

Musk said demand for bandwidth in the next three to five years will be 1000-times higher than it is today.

Related:SpaceX eyes full Starship recovery as Starlink subs miss estimates

"AI or SI agents will, on a per agent basis, use far more bandwidth than a person and there will be far more agents than there are people. So, this ends up requiring a several orders of magnitude increase in communication bandwidth in order to satisfy that communication demand," he said.

The Starlink constellation is expected to have 100-times the bandwidth that it does today "probably within the next three years," according to Musk.

SpaceX will put "on the order of" 100,000 satellites into orbit, "each of which have more than 10-times the bandwidth of the current Starlink system," he explained. "Revenue for Starlink will be at least somewhat proportionate to the total bandwidth delivered. We will also have high bandwidth direct-to-cell capability, and we will be building out our terrestrial networks so that there's broad-based connectivity anywhere in the world that SpaceX and Starlink are allowed to operate."

Musk changes his tune

Back in March 2020, Musk positioned Starlink's broadband service as a help to telcos to bring Internet service to hard-to-reach areas. As Light Reading reported at the time, he told the Satellite 2020 conference: "Starlink is not some huge threat to telcos. I want to be super clear: it is not."

That's all changed as the company now plans to take on the traditional US carriers. But the size of the threat is hard to scope without more details about the satellite/terrestrial network plan.

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