09.08.25
Posted in AST SpaceMobile, Echostar, Globalstar, LightSquared, Operators, Regulatory, SpaceX, Spectrum, T-Mobile, Thuraya, Verizon, ViaSat at 5:47 am by timfarrar
My post last week on the potential scenarios for EchoStar assumed that the buyer of EchoStar’s spectrum would be a terrestrial player, because only using the spectrum terrestrially could produce a return that justified paying Charlie Ergen’s asking price. 12 months ago that was true when the rumors were that SpaceX was only willing to pay a few billion dollars for access to EchoStar’s AWS-4 spectrum.
With Deutsche Telekom apparently getting cold feet about buying spectrum for D2D, and Verizon not yet at the table, that meant the most likely scenario was for EchoStar to continue moving forward with its own constellation, in order to keep control of the whole AWS-4 block and significantly constrain Starlink’s D2D capacity in the US (while having the opportunity to monetize the spectrum in urban areas through leases to a wireless operator like Verizon).
But ROI has never been the primary determinant of SpaceX’s decisions, when the opportunity presents itself to dominate an industry and force competitors out. That’s why we are seeing aggressive actions from Starlink in the satellite broadband market, lowering prices for hardware and service in both the consumer and professional markets to make Amazon Kuiper’s entry harder (including a new unlimited maritime plan for merchant vessels at only $2500 per month, which will also undermine Viasat’s NexusWave).
And in this case, by spending $17B, SpaceX has not only persuaded EchoStar to give up its D2D plans but has now made it much harder for any competitor to move forward when they can’t possibly compete with SpaceX’s speed in bringing new satellites to market. That was evident in the article published by The Information in May, where Apple staff working on the D2D project with Globalstar expressed concerns that their bosses would cancel the effort and decide to partner with SpaceX instead. And we’ve seen more on that front in recent months, as Globalstar’s new satellites have been delayed, and Apple was apparently forced to support Starlink on the iPhone 13 in order to secure a new launch slot.
It shouldn’t be ignored that just like in fall 2022, the SpaceX announcement comes right before Apple’s own event tomorrow to announce its new iPhone. So while this might not be on the agenda tomorrow, decisions about the future of the Apple-Globalstar partnership and the new C-3 constellation will be on everyone’s minds. The cancellation of the EchoStar D2D constellation was already a major blow for MDA, but any decision by Apple to pull back from the C-3 constellation would be even more devastating.
SpaceX especially wants Apple to cooperate instead of pursuing the C-3 constellation because the H-block and AWS-4 spectrum, that SpaceX is now acquiring from EchoStar, is not supported by any current phones (EchoStar’s Band 66 and Band 70 used different frequency pairings). Thus support from device manufacturers will be needed to get the new capabilities enabled by this spectrum into consumers’ hands in the near term. Of course if Apple doesn’t come around, then there’s always the possibility that SpaceX will announce a “Starlink phone” as Apple executives worried about in the May article.
In recent years, Musk has also plotted the ultimate challenge to Apple, said a person with direct knowledge of his thinking: building his own phone to get around Apple’s gatekeeper position in the market. Musk has discussed Tesla building the phone and providing satellite connectivity through Starlink, the person said.
Musk hasn’t kept his openness to making a smartphone secret. He has publicly toyed with the idea on social media at times, but he has also made it clear he doesn’t want to deal with the headaches of such a monumental effort.
“The idea of making a phone makes me want to die,” Musk said at a Trump rally in Philadelphia last October. “If we have to make a phone, we will. But we will aspire not to make a phone.”
And as far as other competitors go, AST is already struggling with enormous delays, which are now even worse than the company indicated in mid August, after the FM1 satellite wasn’t ready to ship at the end of August as promised during AST’s Q2 results. And AST needs to raise over $400M in the next few weeks to make the $420M payment due to Viasat at the end of October. The one good piece of news for AST from this deal is that it very likely means EchoStar won’t retain its EU 2GHz license (though there will undoubtedly be litigation if it is cancelled), leaving AST/Vodafone in competition with SES/Lynk for what will presumably by a paired 10MHz license (assuming Viasat retains its own paired 15MHz license).
It’s also unclear what Viasat will do next, as the company hoped to secure financial backing from UAE-based Space42 to build its own LEO L-band network. While I don’t think a formal deal was likely to be announced next week in Paris, this announcement probably gives Space42 further pause about whether it makes sense to challenge Starlink in the D2D market, especially as the expectation was for Space42 and the UAE government to put up most of the funding.
Finally, I think we can now look to EchoStar to gradually wind down the rest of its operations and sell off its remaining spectrum. The remaining major block is AWS-3, which Verizon might pick up in the next few months, potentially at a discount to the $10B EchoStar paid, especially if Verizon takes on the AWS-3 reauction obligations. And then it would be reasonable to assume that DISH DBS would merge with DirecTV and Hughes could eventually be sold (perhaps to a private equity buyer?).
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08.31.25
Posted in AT&T, Echostar, Financials, Operators, Regulatory, SpaceX, Spectrum, T-Mobile, Verizon at 9:15 am by timfarrar
Last week, EchoStar and AT&T announced a landmark spectrum deal, under which EchoStar will sell all of its 3.45GHz and 600MHz spectrum holdings to AT&T for $22.65B. But many analysts think “this is just the first step and the process is not yet complete“, not least because EchoStar CEO Akhavan commented that “We continue to evaluate strategic opportunities for our remaining spectrum portfolio in partnership with the U.S. government and wireless industry participants”.
The big prize now is EchoStar’s collection of midband assets in the AWS-3, H-block and AWS-4 bands, which could collectively be valued at as much as $30B. Semafor suggested that a three-way deal between AT&T, T-Mobile and EchoStar had been discussed under which AT&T and T-Mobile “would have swapped some of their own spectrum holdings”, but later indicated that “T-Mobile’s ultimate owners, Deutsche Telekom, tapped the brakes”.
This has caused speculation to focus on Starlink and even Kuiper as potential buyers of these assets, but what many articles are getting wrong is the suggestion that this is because (as Semafor put it) Starlink “wants its own network to provide cell coverage, something that would disrupt the stranglehold that AT&T, Verizon, and T-Mobile have on the US market”.
That’s a complete misunderstanding of the Direct-to-Device (D2D) business, which (despite the nonsense promulgated by some AST SpaceMobile investors) is limited to much slower speeds and far less capacity than terrestrial networks. It’s a simple matter of physics that communicating from your smartphone to a satellite hundreds of miles up in space will be less efficient than communicating with a cell tower a mile or two away and that means D2D is not a true substitute for terrestrial cellular service.
The consequence of this lower throughput and capacity is that D2D can’t generate the same revenue from each MHz of spectrum in space as a terrestrial operator on the ground, and so D2D operators can’t afford to pay as much to acquire spectrum. That’s why we’ve seen increased interest in cheaper MSS spectrum, both from Apple investing in Globalstar and more recently AST SpaceMobile bidding for Ligado’s spectrum.
But EchoStar’s mooted $30B price tag is only achievable by buying this spectrum for use in a terrestrial network, which is why Starlink has been trying to persuade the FCC to award it some of EchoStar’s spectrum for free. If that doesn’t work out then Starlink needs T-Mobile to pay the vast majority (if not all) of the $30B that EchoStar is demanding. So if T-Mobile steps back and we see FCC Chairman Carr accepting EchoStar’s offer to sell spectrum (and canceling the idea of a 2GHz MSS NPRM that might open up the band for sharing with Starlink), there’s no realistic prospect of Starlink and EchoStar agreeing on price.
We’d guess that Deutsche Telekom might want to wait for more evidence of the success or otherwise of T-Mobile’s D2D collaboration with Starlink before paying tens of billions for spectrum that they don’t really need, mainly so Starlink can improve the capacity of its D2D network. But if T-Mobile did in the end decide to bid, then either Starlink could buy the H-block (which cost EchoStar only $1.5B) and extend its existing G-block SCS network from 5x5MHz to 10x10MHz, or T-Mobile could offer Starlink access to some of the AWS-4 spectrum in rural areas for D2D.
However, there’s also an alternative path for T-Mobile and AT&T to just swap the 600MHz holdings that AT&T has now agreed to buy from EchoStar, for T-Mobile’s C-band spectrum assets, and not do any further deal with EchoStar.
If T-Mobile did buy all of EchoStar’s midband spectrum, then of course EchoStar’s planned D2D constellation would be abandoned. But there’s no reason to treat that as the default outcome. If instead Verizon puts in a bid for EchoStar’s midband holdings, then it isn’t allied with Starlink and wouldn’t want to risk the possibility that the FCC grants Starlink access to the 2GHz MSS band for D2D and impairs Verizon’s terrestrial usage plans.
So the best way forward would be for EchoStar to go ahead with its own proposed D2D constellation in order to keep exclusive access to the 2GHz MSS band in the US. Then Verizon could buy EchoStar’s AWS-3 and H-block holdings and lease AWS-4 from EchoStar in urban areas, while EchoStar coordinates D2D usage in rural and remote areas outside the reach of Verizon’s towers.
And finally if neither T-Mobile nor Verizon show up with an acceptable bid, then EchoStar will still want to preserve its MSS spectrum rights (and the associated terrestrial spectrum value in the US) by going ahead with the planned D2D constellation. Thus there are four possible scenarios and only in the first of them would EchoStar’s D2D constellation be abandoned:
1) T-Mobile buys all of EchoStar’s midband spectrum (and shares some with Starlink)
2) T-Mobile just does a swap with AT&T (600MHz for C-band)
3) Verizon buys EchoStar’s AWS-3 spectrum and leases AWS-4 in urban areas
4) No one shows up with $30B to meet EchoStar’s asking price.
On balance, assuming FCC Chairman Carr accepts the current EchoStar-AT&T deal, it therefore seems more likely than not that at least the first stage of EchoStar’s constellation will be built. And analysts who assume it won’t be and that Charlie Ergen is simply planning to sell up and retire might instead find themselves watching this show for many more years to come.
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08.12.25
Posted in AST SpaceMobile, Financials, Operators, Services, SpaceX at 9:36 am by timfarrar
AST SpaceMobile did their best on today’s call to obfuscate the delays in their launch schedule, which has already shifted by several months since the company’s last quarterly update in May. Back in May the company’s CEO stated that “we…are now able to announce our plans to support five scheduled orbital launches over the next six to nine months” (i.e. by Nov-Feb) but now the company merely claims that it is “anticipating at least five orbital launches by end of Q1 2026.”
And this demonstrates that the bizarre and contradictory FCC submission in late July saying the company anticipated launching “up to 20 satellites…through the end of this year” appears to have just been nonsense inserted by the management at the last moment, presumably to pump the stock further, as I guessed at the time.
In fact, the FCC certainly will be annoyed by the fact that AST merely expects FM1 will “be ready to ship in August 2025″, indicating that the satellite still isn’t ready for shipment as of today. Again the company obfuscated by adding a picture on slide 6 of the presentation of a “Block 2 Bluebird encapsulated” without indicating that this was actually FM1 (as in the picture above showing FM1 in the thermal vacuum chamber) instead of simply a ground test model. Of course if it was FM1, you can guarantee that AST would have wanted to point that out.
But what’s more significant is that today’s announcement only refers to AST being “on target to complete 40 satellites equivalent of microns by early 2026″ with no mention of how many satellites will be completed by that time. Previously AST had said they were “on track with satellite manufacturing of 40 Block 2 BlueBird satellites”. That’s hardly surprising, because a significant redesign is needed to cut the mass from 5850kg to 4200kg for FM3 and subsequent satellites, and ISRO has already pointed out that FM1 has been experiencing “developmental issues”.
However, by avoiding mentioning the number of satellites they plan to complete, AST clearly hoped to avoid highlighting how few are actually going to be launched on the first five launches through next March. Unfortunately, the presentation gave the game away, when it confirmed that the eight sets of BB2 microns built to date are enough for four launches. That confirms my expectations that after FM1, the FM2 launch will be standalone on F9 and then there will be three satellites on each of the next two Falcon 9 launches. In fact the chart on slide 7 clearly shows AST’s entire planned schedule of 13 launches through the end of 2026, although given the track record of continued delays, it is hard to have any confidence in this actually being met.
My update to this chart above adds actual launch dates to the satellite shipment dates, with launch 5 being at the end of Q1 2026 as the company hopes, and assuming one more month of slip in launches after that. And then adding in the fact that New Glenn is not expected to be available for other commercial launches, including AST, until flight 6 or later, in late summer 2026 at the earliest. Again being generous to the company, I’ve assumed they might get two New Glenn launches in before the end of 2026. And despite trying to correct himself to say “6-8 satellites” per launch, AST’s CEO effectively confirmed that there will most likely be only 6 satellites per New Glenn.
Bizarrely, AST’s CEO didn’t even mention the Falcon 9 launches, as he tied himself in knots, claiming that the company would build 6 satellites per month and then have a launch every 1-2 months. Of course, there’s no point in building 6 satellites per month (let alone 40 sets of microns by early 2026) if you can only launch 3 satellites per launch on the only rocket you have access to for the next year.
So now you can see that this is how AST plans to get to 45-60 satellites in orbit by the end of 2026, which in fact means ~41 BB2s plus the existing 5 BB1s. Of course that only happens if the company somehow avoids the delays that it has consistently reported every quarter and FM1 works as planned. And the supposed intermittent service at the end of 2025 will be utterly pointless, with at most two more satellites in orbit, and most likely one or both of those not even being operational.
EDIT (8/12): It seems likely that AST’s assertions in the headline of the business update that the company is “Preparing to deploy nationwide intermittent service in the United States by the end of 2025, followed by the United Kingdom, Japan, and Canada in Q1 2026″ actually represents the company’s hopes for when SCS approval might be received, not when any sort of service will actually be provided to the public. Or taken more literally, AST may claim this phrase means that “by the end of 2025″ the company will start “preparing to deploy…service” but that does not mean the company is currently preparing for a service to be deployed by the end of 2025.
There won’t be 25 satellites in orbit until July 2026 at the earliest, and it will be Sept-Oct 2026 before these are operational, and capable of generating revenues. Incidentally it was funny to hear the CFO (mistakenly?) claim that 25 satellites will generate positive operating cash flows, when the company’s 10-Q is careful not to include the word positive, simply asserting that “we believe the operation of a constellation of 25 BB satellites will enable us to potentially generate cash flows from operating activities to further support the buildup of the remaining constellation”.
And finally, there won’t actually be even the barest level of continuous (operational) coverage for a few parts of the northern US until the first quarter of 2027 at the earliest. I’m sure AT&T are desperate to forget their CEO’s claims back in October 2022 that they chose AST because it was 18 months ahead of Starlink and T-Mobile.
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08.08.25
Posted in AST SpaceMobile, Echostar, Financials, Globalstar, Operators, SpaceX at 3:38 pm by timfarrar
Although to date EchoStar has only signed a $1.3B contract with MDA for the first 100+ satellites, with the second half of the constellation (and $5B investment) likely to remain as an option for the next couple of years, EchoStar will have to secure its initial launch contracts soon (potentially before more details of the system are revealed in September in Paris), and launches could cost as much as $700M-$800M just for the first 100 satellites.
One key question is whether EchoStar is now willing to put its faith in SpaceX as the launch provider, when SpaceX is fighting hard against EchoStar’s plans and is seeking access to the 2GHz spectrum, which is sorely needed to provide added capacity for the Starlink D2D constellation. Even if Chairman Carr now decides to drop the idea of a 2GHz/AWS-4 NPRM (assuming President Trump prefers to back Ergen instead of Musk) and reject SpaceX’s attempts to access the band in the US, I’d expect the fight to continue on a country-by-country basis around the world.
We’ve already seen a report in the WSJ last fall about how SpaceX appears to have used the leverage of launch contracts to gain coordination advantages for Starlink vs OneWeb and Kepler. And now it looks like a recent delay in Globalstar’s first set of 8 replacement satellites, from what a year ago was supposed to be a launch in the first half of 2025 to now the fourth quarter of this year, has provided more benefits to Starlink as part of the renegotiation of the launch contract (which was also extended to include a second launch of the remaining 9 satellites).
Certainly there are plenty of recriminations flying around about the cause of this delay in completing the satellites: Apple blames MDA, which in turn blames RocketLab, the subcontractor responsible for building the buses. It’s well known that MDA wasn’t happy with RocketLab’s performance on the contract, because MDA decided to bring the bus in-house for the new C-3 constellation. And this quarter Globalstar has now felt moved to add to the “important factors that may cause our actual results to differ materially from those anticipated” within its 10-Q, the risk of the “delay of the completion or launch of new satellites”.
But why would Apple be particularly upset, when these satellites offer no additional functionality and simply provide more resiliency to the existing Globalstar constellation, which (despite one satellite failing in 2025Q1) has lasted better than might have been expected back in February 2022 when the original MDA contract was signed?
It appears that the explanation lies in the fact that in May Apple ended up agreeing to support Starlink’s D2D service on the iPhone 13, a phone that isn’t compatible with Apple’s own Globalstar-based service and was left out of the original iOS update in January 2025. The timing of that decision appears to indicate that this was connected to SpaceX agreeing a last minute postponement of the Globalstar launch slot from Q2 to later in the year. Support for the iPhone 13 now gives Starlink a further advantage over Apple in the D2D race, at a point when Apple was already having an active debate within the company about whether it can (or should even attempt to) match Starlink’s pace of development.
Apple’s reluctance to create an even bigger source of tension with SpaceX also appears to have led Apple to sit out the current fight between EchoStar and Starlink over the 2GHz spectrum, and I believe there’s now no realistic chance that Apple will either invest in or become an anchor tenant for EchoStar’s planned D2D constellation at this point in time, contrary to earlier rumors.
In view of all this what will EchoStar decide about the launch contract(s)? Well one obvious possibility would be going to Blue Origin for New Glenn launches, since the timing of the EchoStar constellation with launches in 2028 is much better aligned with availability of the New Glenn rocket, compared to the contract that AST signed with Blue Origin back in November 2024. At the time, that was seen as an opportune satellite design for New Glenn to launch, as AST’s BlueBirds were supposed to be relatively light but very bulky, making them well suited for the huge New Glenn fairing (with an expectation that up to 8 could fit on a single rocket).
Of course that’s no longer the case, since AST’s first attempt at building a larger satellite has turned into a nearly 6 ton monstrosity. But conveniently for both sides, AST is hugely late in manufacturing its satellites, so there’s now no problem waiting to launch AST satellites (assuming AST can overcome its ongoing “developmental issues”) until New Glenn has space in its manifest in the second half of 2026.
It’s ironic that this mutually beneficial agreement to extend the dates in the AST-New Glenn launch contract has been taken out of context by AST investors and analysts covering the company, claiming that instead there was an agreement for Jeff Bezos to invest in AST. Because in reality, if Bezos wants to secure most of the EchoStar launch contract for Blue Origin, which is likely to be more competitive because there could be other launch options available in 2028, and he wants to continue his personal beef with Elon Musk, he’d be better advised to invest a modest amount in EchoStar’s D2D system instead.
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08.02.25
Posted in AST SpaceMobile, Echostar, Handheld, Lynk, Operators, Regulatory, Services, SES, SpaceX, Spectrum, ViaSat at 9:36 am by timfarrar
Yesterday EchoStar chose to announce its plans for a new $5B D2D constellation of 200 satellites, including an initial US$1.3B contract with MDA to build the first 100 satellites. Though the MDA contract was in line with my prediction back in March, EchoStar’s heavy emphasis on prospective wholesale partnerships with mobile operators during the results call suggests that Apple has declined to provide financial backing for the system. That’s perhaps unsurprising after the press revelations in May describing a lack of consensus within Apple about whether to continue investing in D2D.
As EchoStar CEO Akhavan noted in the results call, EchoStar had to make a decision now, because the EU is in the process of deciding what to do about the current European 2GHz licenses held by EchoStar and Viasat when they expire in spring 2027. Indeed I understand that EchoStar assured the EU of its plans to build this system in its confidential response to the EU’s consultation back on June 30. Now we face an all-out battle between at least four players (Viasat, EchoStar, AST/Vodafone and SES/Lynk) for only two licenses when they are awarded at the end of this year.
However, EchoStar’s announcement also came as an unwelcome surprise to many investors, who were hoping that reports earlier in the week of FCC Chairman Carr’s “Best and Final Offer” to sell AWS-4 spectrum signaled that EchoStar would scale back its ambitions and strike a deal to sell or lease this spectrum. Contrary to some analyst perceptions, the biggest threat from the FCC has always been a potential rulemaking on the 2GHz MSS band that would open it up to additional sharing by Starlink. However, it was also very unlikely that Elon Musk and Charlie Ergen would have a meeting of minds on the value of this spectrum in any commercial deal for Starlink to access the band.
So its now clear that Ergen has decided to defy Carr’s mandate and move forward on his own, without providing any evidence that a major new partner for the system has been secured. Hopefully clarity on financing and partnerships will be provided in September when EchoStar has promised to give more details of its plans. But in the meantime, Carr must decide whether to launch a 2GHz rulemaking or leave Starlink out in the cold without access to MSS spectrum that will soon be sorely needed to increase the capacity of its D2D system. Carr’s decision may well turn on whether Ergen has secured President Trump’s backing, after his recent falling out with Elon Musk, and that would certainly help to explain why EchoStar is highlighting a large headline investment of $5B in the planned D2D system.
Fortuitously for those who are trying to make sense of these developments, yesterday evening I also released my new 100+ page deep dive report on D2D, telling you everything you need to know about D2D technology, regulation and the progress of all the different satellite operators involved in this market, updated with the latest information on EchoStar, AST, Starlink, Apple/Globalstar and other planned systems. We’ve seen lots of ludicrous forecasts about the size of this market, which simply fail to understand the technological constraints on these services in terms of capacity, data rates and costs. Unlike these other forecasts, my analysis looks at realistic capacity, usage and pricing models to assess how many customers Starlink and AST’s systems can serve and what they will need to charge per Gbyte of capacity. That’s a familiar topic to who followed my blog posts on LightSquared back in 2011-12 when it became clear that there was no there there…
I also analyze regulatory constraints, feasible deployment schedules (especially in light of continuing delays for AST which make the company’s claimed launch plans totally implausible) and how much spectrum will be needed for these systems to operate. As I discussed in another report back in January, MSS spectrum (and the 2GHz band in particular) is likely to be critical to providing adequate capacity for D2D constellations. Starlink only has a paired 5MHz block of spectrum in the US, but has already decided that it needed to upgrade to a paired 15MHz block in New Zealand after only 6 months of operations. So EchoStar’s announcement, and how the FCC now decides to respond, will be critical in determining the future direction of this market.
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07.23.25
Posted in Broadband, Operators, Regulatory, Services, SpaceX at 12:12 pm by timfarrar
Last week, the Washington Post published an article about Starlink’s supposed capacity limitations, based on a paper from X-Lab. This is part of the larger fight over the future of BEAD funding and how much should be redirected from fiber to satellite, with a rival ITIF paper suggesting the opposite, that it’s a myth that “LEOs Don’t Belong in BEAD”.
SpaceX has also been lobbying hard on this topic, publishing a network update that notes speeds and latency have both been improving in the US, even with more than 2M active users, and regulatory chief Dave Goldman highlighting his conversations with the FCC, NTIA and others “about how Starlink will make gigabit speeds available to people across the country”. Countering that, several articles have been published suggesting that Starship might never succeed, which would mean SpaceX being unable to launch the larger V3 satellites that the company is “targeting to begin launching…in the first half of 2026″
As one might expect, the lobbyists take an extreme position and the reality is somewhere in the middle: fundamentally there must be some limit to how much it is worth spending on fiber deployment to the most rural and remote locations, when Starlink (and in the future hopefully Kuiper) can provide an high quality, cost-effective residential broadband service. But on the other hand, putting fiber in the ground is a long term investment and it is comparing apples and oranges to equate that to the cost of a Starlink user terminal that the company expects to have a useful life of three years.
The X-Lab paper suggests that Starlink shouldn’t be funded by BEAD in areas where the population density is more than 6.7 Broadband Service Locations (BSLs) per square mile (which corresponds to limiting the addressable market to just over 3M homes around the country). However, when Starlink had waitlists in parts of the US such as the Pacific Northwest in January this year (since replaced by “congestion charges”), these were in regions with an average of about 4-5 customers per square mile, based on Starlink’s estimated US subscriber base in the area deemed “sold out”.
Since not all households would be expected to actually subscribe to internet service, this suggests that Starlink has already seen plenty of demand in areas at or above the proposed 6.7 BSL per square mile density limit, and those customers certainly found it worth paying for, even if the uplink speeds often fell short of the BEAD benchmark. Regardless of when/if Starlink actually gets to orbit, even the current Falcon 9 launch tempo is allowing the capacity of the Starlink service to improve significantly over time, so this proposed cutoff seems too low in limiting where Starlink can usefully provide service.
More to the point, the calculations in the paper simply don’t match the actual constraints on the Starlink service. The assumption is that only one satellite can serve a given cell, but a Starlink user would realize that’s not how it works in practice because if you set up a portable Starlink terminal and take it down each evening, one day you may be told (by the app) to point it say northeast, and the next day you may be told to point it west. That’s because the system is load balancing across the multiple satellites serving a given cell.
At the moment, the primary constraint on the downlink is the FCC’s limit on spectrum re-use (known technically as Nco=1) which means Starlink can only serve a single cell once with a given channel across Starlink’s 2GHz of downlink spectrum (10.7-12.7GHz). While the efficiency of spectrum use varies (for example it’s lower for a Starlink mini than a regular terminal), a reasonable estimate is ~3-4bps/Hz. So 2GHz of spectrum would equate to a maximum of ~7Gbps in a cell, which isn’t too different to the 6Gbps assumed in the paper. However, the FCC has allowed Starlink’s Gen1 and Gen2 satellites to be counted separately for the purposes of the re-use limit, and so the current theoretical maximum downlink speed in a cell is actually twice this level. And now the FCC is consulting on loosening these limits further.
The X-Lab paper focuses more on the uplink capacity as the key density constraint and it is certainly the case that the amount of spectrum available to Starlink is more limited there, because only 500MHz of Ku-band spectrum is allocated to uplink (14.0-14.5GHz) compared to 2GHz for downlink. However, the primary determinant of uplink capacity for Starlink end users is the number of timeslots allocated to uplink transmission, because the network uses Time Division Duplex (TDD) and was originally only configured to support transmission up to 10% of the time. That was intended to ensure that the terminal cannot produce enough radiation to heat up the head of someone standing in front of it (what the FCC refers to as SAR limits). Over time SpaceX has been able to improve this percentage (now 15.5% of the time for uncontrolled use) and professionally installed terminals can go even higher. So there’s no reason to conclude that the supposed 0.4Gbps per beam assumed in the paper is a hard limit.
On the other side of the lobbying effort, the ITIF paper ignores the fact that the BEAD funding mechanisms are extremely poorly suited to fund satellite deployments, as I discussed in this thread on X/Twitter. BEAD has been set up so you bid for money to deploy infrastructure in a particular geographical area, regardless of how many customers actually sign up. That makes sense when funding fiber or even wireless infrastructure: if you build a tower or lay a fiber line, the only way to make a return is to sell service within that coverage area. However, if you fund a satellite operator to build more LEO satellites, then those satellites will spend only a tiny fraction of 1% of the time over that area as they go around the Earth, and can devote 99%+ of the orbit to earning money from more valuable customers. So there is no real incentive for a satellite operator to actually sell service to the unserved customers.
The best way to square this circle would be to provide affordability instead of deployment incentives (i.e. a subsidy for terminals and/or monthly service), so that the satellite operator only earns money when end users in these unserved areas actually sign up, which was how the Affordable Connectivity Program (ACP) was structured. Otherwise the satellite operator is getting paid for something they are already doing: Starlink has over 7000 satellites in orbit already and is launching dozens every week, why pay them to launch a few hundred more? One possibility is to structure reimbursement payments “based on the number of subscribers the provider serves and/or enrolls” rather than “in equal installments throughout the period of performance”.
And when it comes to bidding, why wouldn’t any satellite operator bid a very low amount for the right to deploy service in unserved areas? If they can prevent terrestrial broadband technologies like fiber and wireless from getting subsidies for deployment, then they have a captive market to themselves. Certainly if both Starlink and Kuiper are bidding against one another, and these reimbursements are independent of the number of customers served, it would be logical for their deployment bids to be particularly low, since the cost of simply making service available is essentially zero. We saw in the RDOF auction (when Starlink didn’t face any meaningful competition from other satellite operators) that SpaceX was able to undercut terrestrial technologies, but the fight over whether or not they actually were going to receive their $885M in winning bids, made absolutely no difference to the number of satellites that the company put into orbit.
So in conclusion, satellite has a great opportunity to enhance broadband service in rural areas, potentially in more places than the very lowest density parts of the country. But unless the BEAD payments are linked to the number of customers served, the program will not do a good job of helping consumers realize those benefits.
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07.14.25
Posted in Broadband, Financials, KVH, Maritime, Operators, SpaceX at 4:29 pm by timfarrar
As I told the Wall St Journal last week, the revenue growth reported in the newly filed accounts for Starlink’s international operations is amazing, in the context of a satellite industry that does not grow fast. In fact, Starlink’s near $2B of international broadband service revenues reported in 2024 compares to about $3B for all other satellite operators combined, a roughly 40% market share that has been obtained in only the third full year of Starlink’s operations.
However, that alone represents a warning sign: in order to grow further and faster, Starlink now needs to focus heavily on expanding the market beyond traditional satellite users, not just winning customers from other satellite operators (though of course they will do that too). And terminal prices are already getting lower and lower: Starlink’s consumer terminal revenues in these international markets averaged only about $230 per new terminal manufactured in 2024, so terminal subsidies in 2025 (with 5M terminals manufactured in the last 11 months) may end up being as high as $1B.
These accounts don’t represent the whole of Starlink’s business, they exclude direct US sales to individuals, businesses and the government, which account for more than half of Starlink’s revenues. We’ve just published a note giving a more detailed breakdown of these accounts by customer type and geography, as well as an assessment of the changes to our 100+ page Starlink profile that was published last October. Get in touch if you’re interested in subscribing to our research.
One additional area of interest in Starlink’s financial reporting is the large prepayments that the company has received, which have gone a long way to shoring up its cash position and allowing the company to claim it has $3B of cash on hand (at least before the company handed over $2B of that to xAI). At the end of last year Starlink’s international business had booked over $600M of deferred revenue from one or more counterparties and I’m sure there will be lots of speculation about the source of those payments.
One example of how (much smaller) prepayments work is given by KVH, which as a public company helpfully discloses this information, with enough granularity to allow all of the details to be worked out. We published a profile of KVH last November which discusses all of this, but as shown below, KVH entered into a purchase of 15PB of data for a total of $16.95M in June 2024 (i.e. a price of $1.13 per Gbyte), with the data to be consumed over 15 months (according to KVH’s 2025Q1 call, the “follow-on pool” will be renegotiated “at some point later this year”).
However, according to KVH’s Q1 results, the company is far short of this goal, only having consumed 30% of the total after 9 months, and even being generous in terms of future growth in KVH’s Starlink business, it will likely take until early 2026 for the data pool to be used up. So the question is what will Starlink and KVH do at the end of Q3? Roll the additional data into a new larger pool? Or forfeit perhaps $5M of prepaid capacity?
This highlights one of the challenges for Starlink distributors that commit to prepurchase large amounts of data at an attractive rate. Each time a distributor renews their capacity pool, they may end up more and more dependent on Starlink continuing to supply them with capacity, and less and less able to divert spending to other LEO systems, even if they want to be “network-agnostic.”
And what then for other competing LEO providers who are seeking distributors to sell their services? Which distributors will actually have any spare budget to divert to these other sources of capacity? And what about the risk that Starlink might someday decide not to rollover millions of dollars of unused capacity if a distributor looks elsewhere? That’s likely to add to fears that Starlink will dominate the satellite industry, as I discussed in an NPR podcast a few weeks ago.
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07.07.25
Posted in Financials, SpaceX at 10:27 pm by timfarrar
As we head into summer, attention turns to the question of when SpaceX will launch its next secondary funding round and what valuation will be achieved. Over the last three years we have generally seen press reports in mid to late June, specifically on June 27, 2024, June 23, 2023 and June 13, 2022, which means a summer 2025 announcement is already overdue.
After the sharp jump in valuation to $350B in December 2024, the whisper number was that the next round was aiming for a $500B valuation. But with the political fallout in recent weeks is that still plausible? Is it even possible to raise a multi-billion dollar round for SpaceX right now? Of course there are nonsense valuation models out there, suggesting that SpaceX could be worth $2.5T in 2030, which don’t stand up to a moment’s scrutiny. Even a cursory sanity check would note that the TAM put together by ARK assumes each subscriber would receive 500kbps of provisioned capacity, which doesn’t increase between now and 2040. In reality, Starlink already provisions more than 2Mbps per subscriber today, and that number will need to more than double just to match today’s terrestrial provisioning rates, and then track double digit terrestrial growth rates. And when it comes to the financial modeling, the idea SpaceX will launch over 28,000 Starlink satellites in 2030 and sell all that capacity immediately to grow revenues by more than $80B during that year alone, is simply ludicrous. What is the point of this nonsense other than to convince gullible Musk fans who don’t bother to look at the Excel?
These secondary rounds don’t just serve to provide liquidity to employees, but also provide an important cash float for the company’s operations, due to the difference in timing between when the money comes in and when it’s paid out. It’s no surprise that there’s an equity round each December so that SpaceX can report a large cash balance at the end of each year (and pay down its credit line). That’s why SpaceX needs a very large Asset Backed Line of Credit (ABL), which the company had to increase in size in June 2023 after Elon Musk decreed that there wouldn’t be any more primary equity funding rounds.
The investment by Intesa Sanpaolo in October 2023 was critical in providing billions of dollars of liquidity to the company in the latter part of that year (so that the ABL could be paid down). Then in spring 2024 much of the money was used to buy back several billion dollars of Elon Musk’s SpaceX shares (his economic stake declined from 42.1% to 40.3% and his voting stake from 78.5% to 75.5%), when he needed cash to support a potential refinancing of Twitter. When that refinancing didn’t happen, Musk was able to execute a wash sale to avoid most taxes, by buying Gwynne Shotwell’s shares (and thereby increasing his economic stake from 40.3% to 41.7% and voting stake from 75.% to 79.3%) to persuade her to stay with SpaceX (and reject the Boeing CEO job that Boeing’s board apparently wanted to offer her).
It’s hardly surprising that many in the industry regard SpaceX’s CFO Bret Johnsen as a miracle worker for his ability to keep executing these financial deals and both providing Musk with cash when he needs it, and finding the money for SpaceX to continue investing billions of dollars in Starship plus new Starlink satellites and terminals each year (of course the above referenced nonsense model claims that SpaceX generated $2.6B of free cash flow in 2024 by simply forgetting about huge parts of SpaceX’s business, like Starlink terminals, which consume significant cash and working capital). The question now is whether, despite Musk’s best efforts to annoy the White House, Johnsen can keep the show on the road and execute another equity round at or above last December’s $350B valuation. And if he does, how much of the round will need to come from SpaceX buying back its own shares?
EDIT (7/8/25): Well I didn’t expect the news to break quite that quickly, but SpaceX has revealed that it is hoping for a roughly $400B valuation in the upcoming fundraising round. That number alone shows that the company may be feeling some pressure on valuation, or at least that Johnsen is trying to distance himself from some of Musk’s foolishness, since one might otherwise have expected the mooted valuation to be $420B. What’s even more significant is the suggestion that there will be a primary equity raise, in apparent repudiation of Musk’s April 2023 assertion that SpaceX doesn’t need any more primary equity fundraising rounds, because the company would be able to generate positive cashflows going forward (which was never true, instead SpaceX leaned more heavily on an expanded ABL credit line and then on Intesa Sanpaolo to meet its funding needs in summer and fall 2023).
It will also be interesting to see if more specific information emerges about Starlink revenues, which are now said to account for “more than half of SpaceX’s annual revenue”, because other details, including Starlink’s international accounts, suggest that Starlink’s 2024 revenues (excluding custom satellites, such as those being built for the NRO, which SpaceX doesn’t count in its Starlink revenue figures) were likely in the region of $5.7B, well below some analyst expectations (we published a note for subscribers detailing these previously unpublished Starlink figures last month).
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07.06.25
Posted in Echostar, Financials, Operators, Regulatory, SpaceX, Spectrum at 1:05 pm by timfarrar
After focusing my public posts mainly on Twitter/X threads for the past couple of years, I thought it would be better to resume blogging, especially as it’s got harder and harder to search X posts effectively. I’ve also been publishing numerous research publications, which included a detailed report on the IFC market last summer, an updated profile and revenue forecasts for Starlink in October 2024, and a new report projecting demand for satellite capacity in May 2025 that gives a full breakdown between LEO and GEO out to 2033 across the key professional verticals (maritime, aviation, backhaul, enterprise and government). Unlike some other industry forecasts, we are happy to share full details of our spreadsheets containing the historical base data, forecasting methodology and assumptions. One major satellite operator told us, “your assumptions (especially on the GEO outlook) differ from Novaspace’s, which is a bit more optimistic about the future of GEO (for now). And I tend to agree with your assessment/assumptions.”
And due to increased interest in the sector from investors, and the rapid pace of announcements, particularly in D2D, the research service now includes regular (approximately monthly) updates in response to key developments in the industry and takeaways from industry conferences. These include:
A summary of the WSBW conference (Sep 2024)
A note on the Globalstar-Apple deal (Nov 2024)
A briefing on the Globalstar investor day (Dec 2024)
An update on D2D and Starlink (Jan 2025)
A note on Starlink’s C-band filing (Feb 2025)
A summary of developments at Satellite 2025 (Mar 2025)
A review of AST’s technology (Apr 2025)
An update on EchoStar and the FCC (May 2025)
An update on EchoStar and AST (Jun 2025), and
A briefing giving details of Starlink’s international financials that have never been reported in the press (Jun 2025).
As another subscriber said recently, “Fascinating, as ever. Thanks for your continued bar-settingly-brilliant analysis.”
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02.07.23
Posted in Echostar, Financials, Globalstar, Handheld, Operators, Services, SpaceX, Spectrum at 8:35 pm by timfarrar
Yesterday, Globalstar filed an 8-K noting that on January 31 it had entered into a forbearance agreement with MDA and Rocket Lab, the contractors building 17 new satellites, under which additional payments beyond an initial $20M will be delayed until March 15. In addition, Globalstar noted that:
“The Company is currently exploring financing options for satisfying its remaining payment obligations under the Contractor Agreements, as well as its obligation to refinance its 2019 Facility Agreement. It cannot currently predict whether, and on what terms, any such financing will be available but maximizing shareholder value is the driving consideration.”
The reason for these financing challenges is that Globalstar is unable to close on the new first lien debt agreement to fund the satellites (that was expected to be backed by Apple to the tune of $450M) unless and until it has refinanced the $150M currently owed to Echostar under the 2019 Facility Agreement. Under the September 2022 Partnership Agreements between Apple and Globalstar, Globalstar is required:
“(i) upon commencement of the Services, to convert all loans outstanding under the 2019 Facility Agreement that are held by affiliates of the Thermo Companies (collectively, “Thermo”) into non-convertible perpetual preferred stock with a cash pay interest rate of 7% per annum or lower, convertible preferred stock with cash pay interest rate of 4% per annum or lower, common stock, or another security acceptable to Partner (the “Thermo Debt Conversion”) and (ii) within 90 days of the commencement of the Services, to refinance or convert all loans outstanding under the 2019 Facility Agreement that are held by persons other than Thermo on terms that are no less favorable to the Company than the Thermo Debt Conversion.”
Of course there was no chance whatsoever that Charlie Ergen would agree to exchange first lien debt with a PIK interest rate of 13.5% for preferred stock that would be subordinate to ~$500M of new first lien debt with an interest rate of 4%-7%, so the only plausible reason for Jay Monroe to agree to these terms was a Hail Mary bet that he could find a buyer for Globalstar before the deadline occurred for Echostar’s debt conversion.
That deadline is coming due on Monday February 13, 90 days after Apple began offering services on November 15, 2022 and no buyer has appeared for Globalstar. The Key Terms Agreement has specific provisions dealing with an offer for the company:
(i) Sale Notice. If a third party submits a non-frivolous proposal to acquire any material Required Resource or the Spectrum Subsidiary or for a Change of Control transaction involving Globalstar or Globalstar’s board of directors (or any committee thereof, including the Strategic Review Committee) approves a process with respect to the potential sale of any material Required Resource or the Spectrum Subsidiary or a Change of Control transaction (each, a “Sale Transaction”), Globalstar shall provide written notice of the Sale Transaction, with the material terms and related process of such transaction, including (A) at a minimum the structure of, and the assets proposed to be sold in the Sale Transaction and any relevant timelines or deadlines relating to the Sale Transaction, and (B) other material terms and related process to the extent permitted by Globalstar’s confidentiality obligations (a “Sale Notice”), to Partner within one day following Globalstar’s receipt of such proposal or such determination by Globalstar’s board of directors (or any committee thereof, including the Strategic Review Committee), which Sale Notice shall be considered Globalstar Confidential Information. If Globalstar enters into any confidentiality agreement relating to a potential Sale Transaction after the Effective Date, such agreement shall not restrict Globalstar from providing to Partner any of the information set forth in Section 10.2(e)(i)(A) that is required to be included in the Sale Notice.
(ii) Discussions. Following the delivery of the Sale Notice to Partner, Globalstar’s board of directors (or any committee thereof, including the Strategic Review Committee) shall, and shall cause the management, employees and other representatives of Globalstar to conduct discussions with Partner in good faith and on a non-exclusive basis and provide Partner with all information made available or provided to any potential third party acquiror, to enable Partner to make a proposal to Globalstar for a Sale Transaction, during the ten business day period following the date of the Sale Notice. Globalstar hereby agrees that it shall not, and shall cause its Related Entities, management, employees and other representatives not to, enter into a term sheet or letter of intent or other binding agreement or obligation with any other third party with respect to a Sale Transaction during the ten business day period commencing on the date of the Sale Notice.
(iii) Proposals. If Partner makes a proposal for a Sale Transaction prior to the expiration of the ten business day period, then Globalstar’s board of directors (or any committee thereof, including the Strategic Review Committee) will exercise its fiduciary duties to evaluate Partner’s proposal along with any other proposals for a Sale Transaction. In the event Globalstar’s board of directors (or any committee thereof, including the Strategic Review Committee) determines the proposal from Partner is in the best interests of Globalstar and its stockholders, then Globalstar will enter into a binding agreement to negotiate in good faith with Partner on an exclusive basis for a period of not less than 20 business days.
(iv) Consummation. If Partner declines to make, or Globalstar (after having considered such offer or proposal in good faith) declines to accept or pursue, a proposal for a Sale Transaction from Partner, then Globalstar shall be permitted to consummate a Sale Transaction with a third party, provided that Globalstar shall have first obtained and delivered to Partner a written agreement from the acquiror in the form included as Attachment 7.
So what happens next? The statement in the 8-K that “maximizing shareholder value is the driving consideration” suggests that Ergen will soon (or perhaps already has) submitted a “non-frivolous proposal” to acquire Globalstar, presumably at a very low price, given that Globalstar will soon be in breach of its obligations to Apple. This will trigger the 30 (business) day period for Globalstar to advise Apple of a sale transaction and then negotiate on an exclusive basis, which would also run through the mid March satellite payment deferral period (assuming Ergen has now made an offer for the company).
However, given the cards that Ergen and Apple hold in respect of a potential forced default on the Apple agreement, and that neither appears to have much interest (or belief that there is meaningful value) in Band 53, it is hard to see how their offers would meaningfully exceed the value generated by Globalstar’s satellite services, including the value of Apple’s messaging contract. I estimate that in those circumstances the best Globalstar might obtain would be roughly $1B-$1.5B in cash plus an agreement to assume the costs of the construction contract. That would be a pretty disastrous outcome for Jay Monroe after he’s invested over $800M and 20 years of his life in trying (against overwhelming odds) to make something of Globalstar, and Globalstar shareholders would also be hugely disappointed.
The most interesting question is what Ergen would seek to gain from Apple, if he was to either enable Apple to buy Globalstar at a low price or buy Globalstar himself (presumably through Echostar) and continue the partnership. One obvious possibility could be to collaborate to include the 2GHz satellite spectrum held by DISH and Echostar into future iPhones for additional NTN capacity. Perhaps not entirely coincidentally, Echostar announced plans to build a 28 satellite LEO IoT network just last week.
I also noted a few days ago that D2D is likely to be the next focus for hype over Starlink’s future prospects (which we can already see in the decision of SpaceX’s Jonathan Hofeller to join the Satellite-Cellular panel at Satellite 2023). And I predicted in my D2D report that SpaceX’s next step might be to acquire more MSS spectrum, most obviously Omnispace, but perhaps even Ligado. So now we could face the real prospect of a fight for this new market opportunity and the associated global satellite spectrum rights between Musk and Ergen, building on prior skirmishes over the 12.2-12.7GHz band. Wouldn’t that be fun!
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