According to a report by Reuters on August 4, SpaceX, under the leadership of Elon Musk, is dropping a major blow to the US wireless communication industry. Gwyn Shawter, the company’s president, made it clear during a financial conference call on Tuesday that they will use the 65 MHz spectrum acquired from EchoStar last year to build ground-based infrastructure. This will transform Starlink from a satellite broadband service into a ‘true mobile service’. The company expects to gain ‘a significant number’ of customers from the three major US wireless carriers.
On September 8, 2025, SpaceX announced that it would acquire the rights to use 50MHz of spectrum for AWS-4 and H-block from EchoStar for approximately $17 billion, as well as a license for global mobile satellite services (MSS). This deal includes up to $8.5 billion in cash and $8.5 billion in SpaceX shares, marking a major reorganization in the field of satellite communications.
In November of the same year, both parties revised and expanded the deal. The second deal valued at approximately $2.6 billion included an additional 15MHz of spectrum in the AWS-3 frequency band, based on the original agreement.
Spectrum Acquisition enabled SpaceX to begin building and deploying upgraded satellites using laser interconnection technology. SpaceX stated that this would increase the capacity of cellular networks by “more than 100 times”.
Reuters pointed out at the time that this deal could enable Starlink satellite networks to provide direct connectivity services for devices independently, reducing reliance on terrestrial mobile operators.
This statement is the clearest "declaration of war" to date, immediately causing turmoil in the capital market. On the day the statement was released, the stock prices of the three major American telecom operators plummeted during after-hours trading, with declines ranging from 2.2% to 4%. Investors are concerned that the industry's structure may face a change that has not occurred in decades, and analysts have also voiced their opinions on this matter.
Some analysts point out that the three major US carriers have invested billions of dollars over the past 30 years to build networks covering the entire country and a large user base. David Barden, an analyst at New Street Research, believes that although SpaceX paid EchoStar $19.6 billion in two transactions last year, acquiring the 65 MHz spectrum, this amount is insignificant compared to the spectrum owned by the three carriers. He said, “It makes no sense for SpaceX to try to use the 65 MHz spectrum to replicate the networks built by terrestrial operators using 1000 MHz and taking 30 years to accomplish.”
Analyst Craig Moffett from MoffettNathanson also pointed out that if SpaceX can reach an agreement with a mobile virtual network operator (MVNO) to rent their network coverage, and then add its own satellites and local infrastructure, it could become competitive within five years.
However, some investors have different opinions, believing that the market has not fully recognized the potential impact. David Wagner, investment manager at Aptus Capital Advisors, mentioned SpaceX's "disruptive potential." He also said, "Musk said that investors have underestimated this business, and I completely agree with that."
Currently, regarding the specific investment scale and the construction costs of mobile services, Shortwell did not discuss further at the teleconference. He only said that the company has “great and innovative ideas” that can use capital more efficiently to complete the construction.
