We have long argued that SpaceX is on track to disrupt the global telecom market. Yesterday, the company took a decisive step in that direction with the announced $17B acquisition of EchoStar’s 50 MHz S-band spectrum in the US along with its global spectrum licenses.
SpaceX’s Starlink initially focused on providing broadband internet to underserved regions and later expanded into emergency mobile services (texts, select apps) via partnerships with telecom operators. With this transaction, however, Starlink gains the ability to directly deliver voice and data to smartphones, reducing its reliance on legacy carrier spectrum such as T-Mobile’s in the US.
The deal coincides with the gradual deployment of Starlink’s next-generation Direct-to-Cell (DTC) satellites—around 600 in orbit today—which effectively act as “cell towers in space.” This new constellation is expected to boost DTC capacity 100x and enable full 5G voice and data connectivity, moving far beyond the emergency-only use cases of first-generation satellites.
For now, Starlink says its DTC network will complement terrestrial 5G in partnership with mobile operators. While 50 MHz of spectrum is meaningful in the US., it remains insufficient to compete alone in dense urban markets where carriers hold up to 300 MHz. Given Elon Musk’s track record, however, it seems inevitable that Starlink will continue to expand its spectrum footprint—bringing it closer to bypassing operators altogether and directly competing as a global telecom provider.
Such a shift would transform today’s partners (SpaceX and telecom operators) into competitors and could represent one of the most disruptive events the telecom industry has ever faced, with Starlink positioned to become the first truly global operator.
The acquisition also has implications for AST SpaceMobile, Starlink’s key rival in space-to-cell connectivity. On one hand, Starlink’s scale, spectrum, full voice/broadband solution and roadmap put significant competitive pressure on ASTS. On the other, the Starlink threat could accelerate the space-to-cell initiatives of most mobile operators to avoid disruption, having in mind that ASTS already signed partnerships with many of them and could reap the benefits.
