08.10.26
Posted in Broadband, D2D, Operators, Services, SpaceX, T-Mobile at 9:47 am by timfarrar
As I pointed out in a Wednesday interview on TITV, the most startling claim in last week’s SpaceX results call was Elon Musk’s assertion that “probably a year from now, we will be doing at least 1 flight a day [of Starship], possibly more”. A smart Bloomberg piece by Liam Denning on Thursday highlighted that “Musk is on an accelerating treadmill of prediction” and while “moon factories may be taken seriously-not-literally by investors”, both robotaxis and Starship launches are “quantified and verifiable” so “Musk is on the hook to deliver ever more and, crucially, ever more quickly”.
To date, daily (or even hourly!) Starship launches have been most easily been explained by the supposedly unlimited demand for orbital data centers. But those are dependent on two things: 1) a Starship launchpad suitable for sun-synchronous orbits (for which land is now being acquired in Louisiana) and 2) new chips made at Terafab that are suitable for operating at much higher temperatures (this is in order to maximize radiative cooling in space, since increasing the operating temperature by 100°C will shrink the required radiator size by ~70%). However, neither the launchpad nor the new Terafab chips will be ready until 2030 or beyond, so they won’t contribute to Starship demand next year.
That leaves Starlink as the only realistic source of demand for frequent Starship launches next year and so Musk has been on a rant for much of the weekend on X, seeking to justify demand for 100K+ Starlink V3 satellites (since 365 launches of 60 Starlink satellites each year, times a five year lifetime would be ~110K satellites on orbit) as opposed to Gwynne Shotwell’s far more rational forecast in March that “I don’t think we’ll have more than 15 or 20,000 Starlink satellites” (she instead leaned on the FCC application for “up to a million AI satellites” as the primary driver of Starship demand). Musk has been egged on by cheerleaders such as ARK and Mach33 fawning over the supposed 100x increase in bandwidth (although the latter are at least aware enough to acknowledge that the space industry is now “replete with grifters”).
But remember that current Starlink V2 mini satellites can each serve around 2000 consumers globally, and even if the provisioning rate is doubled, each Starlink V3 satellite should be able to serve 10,000 consumers. So 15K-20K V3 satellites would be enough for 150M-200M customers (fewer if some satellites are devoted to D2D), whereas 100K V3 satellites would only be justified by Starlink acquiring a billion fixed broadband customers, which is more than the total available worldwide market (today there are about 1.6B fixed broadband users, but nearly half of those are in China and Russia).
This problem has forced Elon Musk to make ever wilder claims about demand coming from an “orders of magnitude” increase in demand from “AI and robotics” and subsequently that “AI agentic Internet traffic will obviously VASTLY exceed human usage”, not to mention that “All cars will have Starlink in the future”. First he started with “I would expect Starlink to reach at least 25% market share outside of China…It’s not out of the question that Starlink carries more than 50% of Internet traffic long-term, which would probably be over a trillion/year”, then moved on to “Future versions of our satellites may exceed 50X the throughput of a V2″ and by late Sunday night he was claiming that “It’s possible that Starlink may end up doing >90% of IP traffic, even if competitors 10X their bandwidth”. All I can say is, don’t do drugs kids!
Of course this is total nonsense: except for a very few outliers (such as military users) high bandwidth customers use fiber today and the cost of increased provisioning once fiber is already installed is minimal, in the US the extra IP transit bandwidth if residential customers used 10 times more bandwidth (say 5Tbytes per month instead of 500Gbytes per month) would be about $1-$2 per subscriber per month. Where available, residential fiber users can already get symmetric 10Gbps connections for as little as $50 per month (this example is from Sonic). For comparison, Starlink’s existing community gateways, capable of the same throughput, were reportedly priced at $75,000 per Gbps per month.
Starlink’s fixed broadband service is and will remain inferior to fiber, not least because of constraints on uplink speed, and unlike fiber, Starlink will need to invest huge sums of money in these new satellites if customer usage increases by an order of magnitude in peak demand areas like the US. SpaceX’s S-1 indicates that there has been reduction in manufacturing cost per Gbps of satellite capacity of 3 times from V1 to V2 mini and the expected reduction is 9 times from V1 to V3, but this implies that the V3 satellites will cost around $2M each, to which the cost of launch needs to be added. Thus, even taking an optimistic view of Starship launch costs, 100K Starlink V3 satellites will require a capital investment of well over $200B and most likely $300B+.
Musk also fails to distinguish between fixed and mobile use cases: yes you may want to access AI via your phone, but Starlink Mobile’s D2D (i.e. satellite) service will be far inferior to terrestrial cellular networks in urban and suburban areas (especially indoors), which SpaceX acknowledged by asserting that they now intend to build out a terrestrial small cell network in the US because AT&T, Verizon and T-Mobile have refused to offer an MVNO deal. Ironically, one of the triggers that prompted Musk to make his litany of exaggerated claims this weekend may have been the FT’s interview with T-Mobile’s CEO, which claimed that “The threat posed to mobile operators from satellite companies such as Starlink has been exaggerated”, as the fight over pricing with T-Mobile becomes ever more tense (I expect Starlink’s next moves may include a deal with the cable companies and an acquisition of EchoStar’s CBRS spectrum).
So where does that leave us? Most likely we will never need to find out if there is demand for daily Starship launches next year, because SpaceX won’t actually achieve that goal: a launch every 1-2 weeks by mid year is plausible, but many of those launches will need to be devoted to Starlink Mobile not V3 broadband.
However, a key signpost will be how much manufacturing capacity SpaceX builds out for Starlink terminals: the plan is to double capacity in Bastrop TX this year (while apparently closing down production in El Segundo CA), implying that SpaceX will make around 12M-13M terminals this year and have a run rate of around 300K terminals per week by the end of the year. Unless production increases further, that’s only enough to add about 2M customers per quarter, after allowing for churn. But even to believe claims that Starlink could launch as many as 4000 V3 satellites next year (enough for ~40M net adds but only 2 launches a week on average), Starlink would have to increase production to about 1M terminals per week over the course of next year.
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08.05.26
Posted in Amazon, AST SpaceMobile, D2D, Globalstar, Operators, Spectrum, T-Mobile, ViaSat at 1:30 pm by timfarrar
Last Friday, Amazon filed the draft prospectus for the acquisition of Globalstar which sets out the background of the merger, including details of the process that Globalstar ran in 2025 and early 2026 that resulted in the Amazon deal.
Globalstar and Amazon began meeting between March and September 2025 about “a potential strategic collaboration”. Amazon signed an NDA on September 12 and on October 16 submitted an initial price indication of $47.50 per Globalstar share in cash (~$6B). An updated bid of $65 in Amazon stock (or $75 in cash for public shareholders) was submitted on November 12, and then updated to $70 per share in Amazon stock on November 18. Finally on December 1, this was revised to $90 per share in cash or $70 in Amazon stock (later increased to $75), with a maximum of 40% of the consideration in cash, and Globalstar signed an exclusivity agreement on December 6. Although exclusivity expired briefly over the holidays, it was subsequently renewed and extended repeatedly to allow for finalization of the arrangements between Amazon and Apple and the deal was finally announced on April 14.
More intriguingly, the prospectus identifies three other unnamed Parties A, B and C, in addition to Amazon, that made formal or informal bids during the process:
Party A met with Globalstar “from time to time to discuss, among other things, Globalstar’s business and a potential strategic transaction involving Party A and Globalstar” between February and June 2025, and began due diligence on the company in July, making an initial verbal offer in late August and then a formal share-based offer of $4.3B-$5.7B on October 17 (plus some contingent value rights for “future monetization of certain spectrum licenses”). An updated offer of $65 to $75 per share was submitted on November 12 based on equal parts cash and stock (with the stock valued at Party A’s 60 day VWAP), but Party A declined to raise its offer further on December 4, “including because Party A and Customer [i.e. Apple] had not reached mutual agreement with respect to a post-closing commercial arrangement”.
Party B was first contacted by Globalstar’s financial advisers on July 24 and met with Globalstar over the following month to discuss a potential transaction. Party B began due diligence on September 1 and continued through November, submitting a verbal indication of an all-cash deal at $5B-$6B on October 6, followed by a written update on November 14, valuing Globalstar at $9.5B, “less net debt and any obligations owed to Customer (the terms of which were not specified), consisting of $3B in Party B stock, $3B in cash, and the balance in a contingent value right based on the potential sale or monetization of certain terrestrial spectrum assets of Globalstar.” However, Globalstar advised Party B that its CVR-based offer was not competitive and after signing an exclusivity agreement with Amazon, ignored attempts by Party B to reach out again in January 2026.
Party C was first contacted by Globalstar’s financial advisers between August 13 and 20, and on August 21 signed an NDA (which unlike all the other NDAs signed with potential acquirers in that period did not include a “standstill” provision). In mid-September, Globalstar noted that there was “uncertainty regarding Customer and Party C reaching a mutually acceptable post-closing commercial arrangement” and Party C submitted an indication of interest at $4B-$5B on September 23. Party C informed Globalstar’s representatives “that Party C believed that the value of any stock proposed as merger consideration would likely appreciate” and that “Party C was open to pursuing multiple alternative structures, including an acquisition of 100% of the equity of Globalstar, a purchase of spectrum assets or a purchase of Globalstar’s interest in its partnership with Customer”. Party C submitted an updated indicative bid of $8B on October 6, consisting of 50% cash and 50% in Party C stock, with an expectation that all the stock would go to Thermo. However, shortly thereafter, Apple advised Globalstar that “Party C had not engaged in discussions with Customer in recent weeks”.
Then, on October 17, Party C indicated that they were “potentially interested in a transaction that valued Globalstar in the ‘mid teens billions’ (based on Party C’s assertions that the value of any Party C stock proposed as merger consideration would likely appreciate), but that Party C required additional time to discuss a post-closing commercial arrangement with Customer before it could make an updated proposal.” However, by October 29, Party C reported that “Party C and Customer had not progressed discussions with respect to post-closing commercial arrangements between Party C and Customer” and Apple told Globalstar that Apple “thought it was uncertain that a commercial arrangement between Customer and Party C could be reached on terms acceptable to both parties based on Party C’s current proposals.” A November 11 letter from Party C indicated that Party C “remained interested…but required additional time to obtain Customer’s support for a Potential Transaction between Party C and Globalstar and, if Customer was supportive, align with Customer on the terms of a commercial agreement and negotiate the relevant documents.” However, on December 22, Globalstar was told that “Party C was unable to further pursue a Potential Transaction, including because Party C and Customer had not reached mutual agreement with respect to a post-closing commercial arrangement.”
So who are Parties A, B and C? It’s pretty clear that Party C is SpaceX given that the structure they proposed is very similar to that with EchoStar: 50/50 stock/cash, with an expectation that the stock “would likely appreciate”. It is notable that a major barrier to Party C’s bid was the tense negotiations and resulting lack of any commercial agreement with Apple. This confirms that what I posted last September about the pressure SpaceX was putting on Apple was exactly right, rather than “pretty much everything is wrong” as Elon Musk posted in an attempt to head off further reporting on this issue.
Party B appears to be T-Mobile or Deutsche Telekom, which as I’ve noted previously, were involved in the process, after deciding not to pay up for EchoStar’s AWS-4 last summer, but didn’t make a particularly serious attempt to win. The timing also fits with T-Mobile dropping out of the bidding for AWS-4 in July and commencing due diligence at the beginning of September once it became clear that SpaceX was likely to buy EchoStar’s spectrum.
And then Party A appears to be either RocketLab or AST: the giveaway here is the 60 day VWAP between mid September and mid November 2025, which covers a period when the share price of both companies surged to a peak before falling back. In my view it was probably the former, since RocketLab would already have been meeting with Globalstar between February and June 2025 to discuss “other things”, namely the delayed replacement satellites. And RocketLab is less likely than AST to have been interested in retaining “certain spectrum licenses” (presumably terrestrial Band 53 rights).
So what does that imply for the universe of potential spectrum bidders for Viasat’s L-band, as investors have asked me on numerous occasions in recent weeks? There’s little chance that AST and Viasat could reach a meeting of minds over L-band, and RocketLab is off the table after the recent Iridium deal. SpaceX doesn’t need more MSS spectrum right now (and certainly not Viasat’s spectrum which is mostly outside the US): if anything SpaceX will be buying US terrestrial spectrum, most plausibly EchoStar’s CBRS spectrum to facilitate a potential cable partnership for Starlink Mobile V2.
Amongst Parties A, B and C, we are therefore left with T-Mobile/Deutsche Telekom, but after saying on the last earnings call about D2D that “having worked closely with satellite over the last 4 years, we’re just not seeing that incremental differentiation” it appears unlikely that T-Mobile would be interested in investing in satellite spectrum. And does Amazon want to acquire more D2D spectrum right now, especially when it has so much on its plate getting the broadband system into orbit and completing the Globalstar acquisition?
As a result, I think bidders for Viasat’s spectrum are likely to be scarce or non-existent, and despite the challenges that Equatys faces after the loss of RocketLab, it looks like Viasat will continue trying to build a D2D constellation, rather than selling its spectrum to others. Or as Viasat said on the results call last night, “what we’re holding up for is to have the next announcement, which really would be about the Equatys purchase of its initial satellite constellation.”
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06.26.26
Posted in D2D, Financials, SpaceX, Spectrum, T-Mobile at 8:28 am by timfarrar
Since the SpaceX IPO earlier this month, speculation about SpaceX entering the mobile market has reached fever pitch, most recently in an FT article that cites comments made by Gwynne Shotwell to investors during the IPO roadshow. And of course we’ll hear imminently about the results of FCC Auction 113, where SpaceX is one of the bidders, and some analysts have been suggesting that SpaceX will buy much or all of the $3.5B in spectrum that was sold, not just the two unpaired licenses that SpaceX definitely need for their Band 70 offering (and which only sold for $10.5M).
But what is not being talked about is the context of a knife fight behind the scenes between SpaceX and T-Mobile over what T-Mobile will pay for the T-Satellite service after exclusivity expires next month. Because SpaceX was desperate to secure a launch partner and pre-empt Apple’s announcement with Globalstar back in August 2022, the current contract is reportedly only valued at “about $100M” in total since 2022, which means T-Mobile is likely only paying a few million dollars per month for the service. That’s only of order $1-$2 per monthly active user, when less than 10% of T-Mobile customers with T-Satellite included in their plan make use of the service in a given month. Or put another way, about $0.10 per month for each customer with access to the service.
But late last year, when SpaceX looked like it was going to come up short of Elon Musk’s 2025 projection of $15.5B in revenues, it seems the company booked an incremental $632M in (deferred) Starlink Mobile revenues so SpaceX would come close to Musk’s target (SpaceX’s actual reported revenue last year, excluding xAI, was $15.473B). That’s far above the current runrate reported for Starlink Mobile of $85M in 2026Q1.
So now, in order to show growth in 2026, SpaceX needs vastly increased revenues from T-Mobile (5-10 times the current level), when (based on the 2026Q1 runrate) T-Mobile is seemingly paying much less than SpaceX’s other MNO partners. As an example, I understand Rogers in Canada has suggested it might end up paying SpaceX up to CAD100M per year in a market which is about one tenth the size of the US. And we’ve seen numbers being floated like $500M per year for Starlink Mobile to provide service in Iran.
What is clear is that T-Mobile does not believe the service is worth that much, which is why they are being so vocal about how “most of the usage we’re seeing is in national parks” and “we’re seeing a lot less usage than we were originally thinking”, later quantified as “satellite usage is 0.0002% of our total network usage” and “pretty much, no one buys satellite stand-alone”. T-Mobile is even explicitly stating that “we expect that our exclusivity will end”.
T-Mobile is offering some carrots as well as sticks, promoting its new Super Broadband solution with Starlink as a backup for businesses. And of course in Europe, Deutsche Telekom’s support is going to be even more critical after the recent EU 2GHz proposal indicated that Starlink would not be allowed to utilize EchoStar’s spectrum license, even though that license will be extended to spring 2029.
But the proposed D2D joint venture with AT&T and Verizon aims to stop SpaceX from playing off the mobile operators against one another, and the operators have been united in their refusal to consider an MVNO relationship with SpaceX.
This is certainly the right time for the MNOs to hold the line on pricing of the Starlink Mobile service, as it will set an advantageous precedent for future D2D services if the wholesale cost for MNOs is in the low tens of cents per customer per month (an order of magnitude lower than the $2-$3/month assumed by many D2D proponents). And it seems hard to imagine SpaceX turning off the T-Satellite service before its own offering is ready in 2028 (though I wouldn’t completely dismiss the possibility of SpaceX completing the EchoStar transaction early and using some of the Band 70 spectrum on the current Starlink DTC satellites).
Are SpaceX’s current threats enough to change the mobile operators’ minds, even if SpaceX does buy more terrestrial spectrum? It’s always been expected that there will be some direct-to-consumer Starlink Mobile offering, most likely in the form of a smaller version of the Starlink Mini (a Starlink Nano?) operating in MSS frequencies with a much improved battery life, that you can connect to your phone via Bluetooth or WiFi. That’s very different to offering a fully fledged mobile service, when satellite links won’t deliver the data rates and inbuilding penetration expected from a terrestrial network.
But threats to buy a mobile operator or build a terrestrial mobile network seem like a paper tiger, which would do nothing to leverage SpaceX’s “core strengths” as set out in the S-1:
Global leadership in orbital launch services
Unrivaled satellite and connectivity platform across design, manufacturing, deployment, and operations
Truth-seeking AI model enhanced by real-time data
Extreme vertical integration enabling high velocity and superior cost efficiency at scale
Unique ability to scale new trillion-dollar markets across Space, Connectivity, and AI
Business models that are incredibly difficult to replicate
Our mission-driven culture and world-class talent.
So I look forward to seeing the revenues that SpaceX is able to report from Starlink Mobile in Q2 and Q3, and whether this is really a growth engine for the company in 2026, or if revenues actually fall from 2025 levels. If that’s the case then Starlink Mobile will presumably become another business (like Orbital Data Centers) where the hype is focused on what might be achieved with a next generation constellation in 2028 and beyond, while analysts continue seeking attention by playing up the possibility of SpaceX building, buying or leasing capacity for a fully fledged mobile service.
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03.02.26
Posted in Aeronautical, D2D, Globalstar, Operators, Regulatory, Services, SpaceX, Spectrum, T-Mobile at 7:36 am by timfarrar
It was fascinating to see today’s announcement at MWC, that Starlink is partnering with Deutsche Telekom to “support over 140M subscribers across 10 European countries“. Most remarkable is that DT is explicitly confirming that “the service will operate only in Starlink’s MSS (Mobile Satellite Service) spectrum”, effectively treating renewal of EchoStar’s existing 2GHz MSS license in Europe as a fait accompli.
That’s perhaps not surprising, because I’m told that an announcement from the EU on the process for reallocating the 2GHz licenses after they expire in spring 2027 remains stalled, and may take several more months to emerge. As a result, the expectation is that the current licenses (held by Viasat and EchoStar) will be extended, probably by two years, to allow time for that process (with appeals and a need for subsequent actions by national regulators) to conclude.
But there is a wider context here to the alignment between Starlink and Deutsche Telekom here, which is seemingly happening with the implicit backing of the German government (and makes me wonder what will happen to Tesla’s factory in Germany this week).
Back in January, news broke that Starlink had struck a fleetwide deal to equip Lufthansa’s aircraft with connectivity. After the prior loss of IAG to Starlink in November 2025, Lufthansa was the last remaining anchor customer for Viasat’s European Aviation Network (EAN).
Lufthansa’s defection fatally undermined the case to retain EAN in its current form and therefore has called into question the need for Viasat to retain 2x15MHz for its 2GHz MSS license. In supporting Viasat’s application for renewal, Lufthansa had even gone as far as to claim that “The EAN is a critical building block in continuing our journey to offer an industry-leading connectivity solution to our passengers.” Of course, it will take some time to replace the EAN terminals on both Lufthansa and IAG, but that just reinforces the rationale for a two-year extension to the current European 2GHz licenses, before any changes take place.
Those changes could potentially reduce both Viasat and EchoStar to paired 10MHz blocks and free up a third license for a European provider (prompting a fight between the AST/Vodafone partnership and the SES/Lynk/Omnispace grouping). But now I wonder if DT might switch its position and suggest cutting Viasat to 2x10MHz, in order to free up 2x5MHz for IoT, while leaving EchoStar/Starlink with the full 2x15MHz. Though whether that would fly with EU regulators is far from clear.
What is interesting is that Lufthansa’s decision to defect to Starlink was apparently very sudden, in fact I’m told that Lufthansa had been negotiating a major deal with another IFC provider for the last couple of years, which was close to being confirmed publicly, and rumors suggest that the German government had a hand in the switch.
Now we have a similar major deal between Deutsche Telekom and Starlink that comes after DT reportedly vetoed T-Mobile US’s plan to buy EchoStar’s spectrum last summer to enhance the partnership between TMUS and Starlink. And last June, DT had been just as unenthusiastic about any changes to the 2GHz band, stating that “Deutsche Telekom AG plans to continue operating the European Aviation Network (EAN) using the MSS 2GHz spectrum beyond 2027…preserving the current spectrum allocation is crucial for the continued operation and economic viability of the EAN.”
So the natural question is “what changed”? I’m told that even after vetoing the TMUS-EchoStar spectrum deal (and then replacing the TMUS CEO while privately characterizing TMUS as “going rogue”), DT continued investigating D2D options and was one of three companies that looked at Globalstar when that asset was put up for sale last fall (the other two being SpaceX and Apple).
But nothing happened there, and now DT has decided instead to strike a major partnership with Starlink, preferring to rely on the 2GHz MSS band over Globalstar’s Big LEO spectrum. And there’s even a DT panelist (Jaroslav Holis) scheduled to speak at the Equatys event on Wednesday which raises the question of what DT might have been exploring there. So I’m left wondering whether there are wider German political factors behind the decisions of both Lufthansa and Deutsche Telekom to reverse themselves in short order.
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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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07.25.25
Posted in AST SpaceMobile, AT&T, Operators, Regulatory, T-Mobile at 8:58 am by timfarrar
It’s been obvious for a long time that the quality of AST’s regulatory submissions has been poor, which has led to considerable delays in gaining FCC approval, as was evident when it took more than four years from the time AST’s initial petition for market access was submitted in April 2020 before approval was granted in August 2024 for launch of five BlueBird-1 satellites. I heard complaints on more than one occasion that more professionalism was needed from AST, with contrasts drawn to the high quality and intense focus of SpaceX’s regulatory team working on SCS. And the company seemed to have acknowledged this concern by hiring Jennifer Manner in May 2025.
But over the last month, AST and its partner AT&T have taken it upon themselves to go to a whole new level in causing annoyance to FCC staff. On July 1, AST “urge[d] the Commission to approve the [FM1] Application by July 11 to allow safe shipment of FM1 for its scheduled August launch on time. Failure to do so will place our ability to launch in August at significant risk.” The irritation of FCC staff was clear in a July 2 email noting that “due to substantial changes in the technical parameters of your S-band request, we will need to coordinate new spot frequencies with NTIA. This will restart the coordination timeline with NTIA”. Nevertheless, the NTIA and FCC pushed this through and granted the FM1 approval on July 11 as requested. But then AST didn’t ship the FM1 satellite the next day, and has now revealed that in fact the satellite won’t be shipped to India until August. So why did the FCC and NTIA have to put in all that work over the July 4 holiday?
AT&T’s actions this week have been even more egregious, with an announcement on July 23 (timed to try and counter T-Mobile’s launch of Starlink D2D satellite service that day) stating that “On Monday, July 21, AT&T and AST SpaceMobile successfully completed the first-ever native voice call (VoLTE) and text (SMS) made directly through AST’s Block 1 satellites with a standard cell phone using AT&T spectrum and passing through the AT&T core network.” But AST’s license for testing with AT&T expired on May 30 and the request for renewal has not yet been granted. So if AT&T did conduct a “call and text [which] utilized AT&T’s spectrum and commercial network” on July 21, that was clearly outside the licensed testing period.
As an aside, it’s also worth noting that AT&T has now pulled back on prior claims that AST will support broadband data services including video calls, modifying the website from the original version to indicate only that “One day [the satellite service] may also support video services”. AT&T also shifted from claiming that “Our customers will have access to a satellite-based cellular network with a standard smartphone – no special device is needed” to indicating that “More information on eligible devices and service requirements will be shared closer to launch”.
One potential reason for the delay in the FCC renewing AST’s applications for continued testing is that AST has also simply ignored the conditions of its test licenses, which required the company to “submit a test report in the ELS license file for this grant within 150 days reporting on activities occurring during the first 90 days of the license”. So for the AT&T testing license granted on January 23 (the grant letter erroneously says 2024 but it was actually granted on January 23, 2025), the initial test report would have been due by no later than June 22. However, to date, no test reports have been filed for any of AST’s BlueBird-1 experimental license grants.
The FCC has been accommodating of AST’s regulatory failings to date, and put the company’s June 2025 modification submission on public notice with regard to the feeder links and TT&C. That might even allow for approval of satellite launches later this year if the recent submission of an SCS agreement with FirstNet is deemed compliant. But before getting to that point, the FCC will also need to decide whether to overlook AST and AT&T’s recent violations of AST’s experimental license conditions.
EDIT (7/25): Well it seems like I ruined somebody’s Friday evening dinner plans, because a few hours after this post was published, AST submitted the delinquent 90 day test report for its experimental testing with AT&T and Verizon. Presumably the other missing test reports for the UK and Turkey will be filed soon as well.
EDIT (7/26): If the FCC was mildly annoyed with AST’s incompetence before, they must now be completely furious after AST submitted a new letter on Friday evening, characterized as a response to the Space Bureau’s request for additional information. And I can only conclude that the company’s engineers are total idiots. This letter completely contradicts itself, with the answer to question 1 stating that FM1-FM23 “will be deorbited from 520km through atmospheric drag” while AST’s “additional clarification” at the end indicates that after FM1 and FM2 (which is now clearly intended to be launched on a dedicated Falcon 9 rocket at huge cost), of the “up to 20 satellites” that AST “anticipates launching…through the end of this year…the remaining 18 satellites will operate at an altitude of 690km”.
And if this “additional clarification” is taken at face value, then the current public notice and comment period has just been invalidated, since the comments received on July 21 were based on AST’s June 12 submission, which claimed that FM1-FM23 would orbit at 520km and that these satellites would only carry 20kg of fuel. I’m left wondering if the paragraph on “planned upcoming satellite launches” was simply inserted by company management at the last minute to try and pump up the share price, and no one checked for compatibility with the rest of the document or AST’s prior submissions.
Of course if FM3-FM23 were at 690km then that’s not compatible with AST’s claim today (in response to question 5) that “The nominal deorbit plan is powered deorbit to below 530km”. And incidentally it also makes no sense for AST to suggest in response to question 4 that “During the disposal phase, the spacecraft will randomly tumble due to its shape and mass distribution throughout its descent, except for collision avoidance maneuvers during which the spacecraft will operate with an edge-on orientation” when AST indicates in question 1 that only “approximately 1kg of Xenon will remain available on FM1-FM23 for collision avoidance maneuvers throughout the mission-life and post-mission phases” since that’s certainly not going to be sufficient to stabilize such a huge spacecraft within a few hours and perform collision avoidance. Is AST instead suggesting that after FM2 it will move straight to launching FM24 and defer FM3-FM23 until later? Or is AST intending to use direct injection to 690km? It’s impossible to tell…
This continues AST’s prior incompetence in engineering submissions that was so evident during the review of FM1, when the company claimed that the mass in the Orbital Debris Assessment Report didn’t add up because of “quantity errors in the input” and “omissions” of various components. Then AST just added in suspiciously round numbers of 5000 fasteners (each weighing exactly 10g) and 100 brackets (each weighing exactly 500g) and still couldn’t make the mass of the phased array on FM1 and FM2 add up to 2863kg (an error of 117kg which has been carried over to the June 12 modification application).
It’s now hard to see how anyone can prepare reply comments based on this new nonsensical AST submission. So unless and until these issues are clarified, I suspect the FCC will either have to extend the reply timeline or even restart the whole process from scratch.
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02.05.23
Posted in Globalstar, Handheld, Iridium, Operators, Regulatory, Services, SpaceX, Spectrum, T-Mobile at 9:42 pm by timfarrar
There’s been plenty of hype about the Direct-to-Device (D2D) market for satellite to smartphone connectivity in the last couple of years, and that has only intensified in the wake of recent announcements about Apple’s partnership with Globalstar and Qualcomm’s partnership with Iridium. Some analysts have even gone so far as to suggest that D2D represents the “largest opportunity in Satcom’s history“.
But the reality is that going beyond basic messaging presents significant technical challenges, and the messaging market will remain modest in size, anchored as it is by the size of Apple’s deal with Globalstar, which costs Apple little more than $100M per year for both global coverage and the ability to support tens of billions of messages per year. Regulatory challenges are still significant, with some regulators going so far as to ban systems that plan to use terrestrial spectrum from operating anywhere near their territory.
Nevertheless, D2D is becoming the next opportunity that SpaceX can hype, beyond its core fixed broadband market, as it looks for additional increases in the company’s valuation so it can keep raising money to keep developing Starship, while putting even more distance between Starlink and broadband competitors like OneWeb and Kuiper. And just as SpaceX has scared away potential investors in nascent LEO broadband systems like Telesat’s Lightspeed, we expect SpaceX to crowd out many of the other players in the D2D market, now that funding for speculative space projects is becoming more scarce.
Unfortunately, the perspectives of some investors and commentators have been skewed by the unrealistic D2D projections that were made during the SPAC boom, and they have failed to look at relevant benchmarks such as current levels of spending on international roaming. Our new 70+ page report on the D2D satellite smartphone communications opportunity, which has just been released, looks in detail at the regulatory constraints and technical limits to system performance, and projects revenue growth in both the messaging segment and in the voice and data segment over the next decade.
Our conclusion is that while D2D messaging is likely to deliver meaningful upside for existing MSS networks like Globalstar and Iridium, it will be much more difficult to gain global consensus on use of terrestrial spectrum. As a result, SpaceX is likely to hedge its bets and pursue a twin-track strategy of seeking access to both terrestrial and satellite spectrum, and potentially follow up its 2021 acquisition of Swarm with further deals to buy satellite operators and their spectrum licenses.
Then, as Starlink moves beyond its initial D2D messaging capabilities later this decade, and perhaps even amplifies the hype still further by suggesting that the next step will be to build a SpaceX smartphone, Starlink is likely to gain a majority share of the D2D market. Even so we project the potential market size to remain far smaller than Starlink’s fixed broadband opportunity and it is not at all clear that it will be possible to make an economic return on these D2D investments.
If you’d like to order a copy of the report then an order form is available here. And you can hear me speak about many of these issues this coming week at the SmallSat Symposium in Mountain View, CA.
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02.09.19
Posted in AT&T, Financials, Intelsat, Operators, Regulatory, Spectrum, T-Mobile, Verizon at 2:02 pm by timfarrar
It’s now just over a year since I first wrote about the possibility of a “pioneering market-based transfer of [C-band] spectrum to higher value uses” which could allow satellite operators to sell part of the C-band to boost Verizon’s 5G network capacity. In that time, the process has moved forward significantly, with the FCC issuing an NPRM in July, to which comments and reply comments were received late last year.
Opposition from the cable companies has been growing, as they’ve become scared by the prospect of new wireless broadband competition, with Verizon, T-Mobile and AT&T all admitting that they have no better plan than to use the huge amounts of capacity that their new 5G networks will create, to compete in the fixed broadband market.
But it was truly ironic to see New America and Google team up with the cable industry last week to claim that the plan put forward in the NPRM for a private market transaction represents “The Great Airwaves Robbery” because satellite operators rather than the Treasury will receive the proceeds. Not only are these very odd bedfellows, but Google has traditionally been on the side of freeing up more spectrum and encouraging broadband competition, rather than trying to block such an effort.
However, it now seems that if Google can’t get what it wants in the C-band (meaning essentially free access to the band on a shared basis), it will seek to derail the plan for a market-based approach. While one reason for Google to mount this effort is to prevent C-band from undermining interest in the CBRS band in which has invested a lot of time and resources, a cynic might also say that Google would prefer a “Political Spectrum” where the FCC would be able to insert policy provisions that suit Google, especially since an FCC-run auction wouldn’t take place until after the next Presidential election in November 2020.
That’s certainly been the case in the past, when Google persuaded (Republican) FCC Chair Kevin Martin to include Open Access provisions covering the upper C-block into the rules for the 700MHz auction in 2008. Of course, despite the fact that the Open Access conditions ultimately proved to have no effect on the wireless market, Google didn’t care that these provisions meant that the C-block spectrum sold (to Verizon) for less than half the price of the unrestricted paired A and B blocks, costing the Treasury something like $6B in auction proceeds.
Nevertheless, it is clear that the various sides of the C-band debate appear to want to capture all of the benefits for themselves, without looking for a compromise solution. This includes the satellite operators, where Preston Padden of the C-band Alliance (CBA) has claimed that there is “no alternative” to the CBA Plan, which gives all of the control and sale proceeds to the satellite operators. In fact there is a fairly simple compromise option, which follows the traditional FCC model of splitting the baby, so everyone gets something out of the process. That was followed back in 2003, when the initial approval of Ancillary Terrestrial Component (ATC) flexibility for MSS operators was given in exchange for 30MHz of the 70MHz of 2GHz band MSS spectrum being reallocated to terrestrial services (this ultimately became the G block and H block spectrum).
So a relatively simple solution at this point would be to allow the satellite operators to sell the 180MHz of spectrum at the bottom of the C-band, and keep the proceeds (part of which would be used to pay for new satellites and filters to enable continuation of video delivery in the remaining 300MHz of spectrum), while the FCC conducted an overlay auction of terrestrial mobile licenses in the rest of the band (excluding a modest guardband of perhaps 50-100MHz below 4200MHz to preserve key services and protect aeronautical users in the 4200-4400MHz band). Purchasers of the overlay licenses (which would cost considerably less than the spectrum being sold by the CBA) would then be able to pay C-band earth station owners to move their earth stations away from major cities or migrate them to fiber, in order to clear the spectrum in high demand areas, with no additional compensation due to the satellite operators (since the satellite operators would already be receiving a windfall from the spectrum they sold).
All parties could then be compensated: the satellite operators would receive proceeds from selling 180MHz of spectrum (potentially worth $11B-$18B at $0.20-$0.30/MHzPOP), the Treasury would receive proceeds from the overlay auction (potentially worth $4B-$5B from selling 270MHz at $0.05/MHzPOP) and the earth station operators would receive compensation if they decided to migrate to fiber or relocate their earth stations to clear the overlay spectrum. And both the FCC and the wireless operators would be happy, with T-Mobile’s demand for 300MHz+ to be made available being met if they bought the overlay licenses and paid to clear the spectrum in the areas where they needed spectrum, while Verizon and AT&T could get the spectrum they need in the near term by agreeing a deal with the CBA. Even Google could acquire spectrum in the overlay auction, if they really did want to buy spectrum, rather than just prevent others from getting hold of it.
Of course the cable operators might not be happy with the additional competition for their broadband business, but they would also have the option to acquire spectrum in the overlay auction, and compete in the wireless market themselves, especially since they would have an easier time clearing their own earth stations out of the band. And if they didn’t want to do that, they could hold out for compensation from the holders of the overlay licenses.
Will the CTIA and the wireless operators now be prepared to push for such a compromise? Will the satellite operators accept that they can’t have it all? And will the cable operators and Google accept that blocking the reallocation of C-band spectrum to terrestrial is an unacceptable outcome? That depends on whether the FCC is willing to rule that none of the parties should get all of what they want, but everyone can get something.
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01.29.18
Posted in AT&T, DISH, Operators, Regulatory, Spectrum, T-Mobile, Verizon at 5:40 am by timfarrar
Before yesterday’s Axios article suggesting that President Trump’s National Security Council has set its sights on using the 3.7-4.2GHz satellite C-band downlink spectrum for a national 5G network, it was clear that analysts were underestimating the importance of this spectrum band for the US wireless industry. For example, Morgan Stanley’s January 17 downgrade of DISH Network identified Verizon as the “only suitor” for DISH’s spectrum but only suggested the CBRS auction as an alternative option for Verizon to acquire more spectrum.
It seems few people have read the reply comments filed by wireless operators in the FCC’s mid-band spectrum proceeding last November, where Verizon suggested there should be a a near term NPRM with market-based clearance mechanisms, rather than FCC-run auctions for this band. In contrast, AT&T asked for “substantial record development, including additional analysis and modeling” before the FCC moves forward with an NPRM, and T-Mobile said the FCC should reject Intelsats proposal and instead take control of the auction process, with a defined post-auction band plan and payments to incumbents from the auction proceeds, part of which would fund the clearance of existing users.
A logical conclusion is that Verizon believes it could be the sole player to acquire spectrum rights in this band (to supplement its 5G mmWave buildout plans) via a deal with Intelsat, while AT&T has relatively little interest due to its focus on the 700MHz FirstNet buildout and securing additional mmWave spectrum allocations, and T-Mobile is trying to ensure that Verizon is unable to monopolize this spectrum band by asking for a more open auction process.
One important consideration is that the power restrictions that will apply to the CBRS band to permit spectrum sharing may not be necessary above 3.7GHz and therefore with MIMO this band could be deployed for urban coverage on approximately the same cell grid used for PCS and AWS spectrum, as Qualcomm and Nokia have indicated, and as is planned in Europe, where the 3.4-3.8GHz band is being auctioned.
Since the reply comments were filed, Intelsat has continued to push hard for a near-term NPRM and given the difficulties that the FCC would encounter in defining how a “market-based” transaction should occur, it is entirely plausible that an exclusive spectrum deal between Intelsat and Verizon could be struck shortly after a draft NPRM was issued. By selling say 100MHz of spectrum to Verizon, Intelsat would establish a benchmark valuation for its C-band spectrum assets, while being able to maintain existing video distribution services within the remaining 400MHz of spectrum. Of course, Verizon would also presumably be happy to see Charlie Ergen left at the altar without his “only suitor”.
The Trump NSC memo only serves to increase the pressure to execute such a transaction, and pre-empt any (still remote) possibility of the spectrum being “nationalized”. Verizon could certainly promise to build a 5G network using this spectrum within 3 years, without government intervention, and gain an even more concrete lead in 5G network superiority. Meanwhile Intelsat (and other satellite operators including SES) could keep providing their existing C-band video distribution services and receive billions in cash plus additional billions in attributed spectrum value for the remaining 400MHz of spectrum, and the FCC could achieve a pioneering market-based transfer of spectrum to higher value uses. What’s not to like about that deal (unless you are AT&T, T-Mobile or DISH)?
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