As Elon Musk plans to shake up mobile industry, AT&T CEO John Stankey says that the economics and technical aspects of Starlink’s plan don’t line up
AT&T CEO John Stankey has cast doubt on Musk’s plans to turn SpaceX’s Starlink satellite network into a direct competitor to wireless carriers, arguing that the economics and technical realities behind the strategy do not add up. Speaking to Axios, Stankey described SpaceX’s ambition of becoming a major challenger to traditional telecom companies as “not a viable strategy,” even as Elon Musk and Gwynne Shotwell, president of SpaceX, have outlined plans to expand Starlink beyond satellite internet and into mobile services.
Starlink aims to challenge telecom operators
The comments come as SpaceX seeks to leverage Starlink’s growing satellite network to compete more directly with established telecom operators. Shotwell recently said she expects Starlink to win customers from traditional carriers, arguing that the company’s service would be superior. The remarks rattled investors, with shares of major telecom firms including AT&T, Verizon and T-Mobile reportedly falling after SpaceX highlighted its ambitions. According to SpaceX’s public disclosures, Starlink had 12 million subscribers and a constellation of 10,200 satellites covering 167 countries as of June 30. The connectivity business accounted for 55% of SpaceX’s revenue, making it the company’s biggest revenue generator.
AT&T’s counter-bet: fiber over satellite
AT&T is leaning hard on fiber infrastructure to grow its internet business at a moment when AI is driving surging demand for connectivity. The company announced a $3 billion deal with Corning on Tuesday to expand that infrastructure, arguing fiber delivers speeds three times faster than satellite. Stankey was blunt about the comparison, telling Axios that nothing beats fiber, and that even if satellite technology performs at its absolute best over the next decade, it still won’t be able to match what fiber delivers.
Starlink’s mobile ambitions
Starlink already competes with traditional telecom companies for home and business internet customers, and SpaceX has now started talking openly about a mobile business that would put it in direct competition with wireless carriers. Shotwell added fuel to that narrative in August, during SpaceX’s first earnings call as a public company, predicting the company would win over a meaningful number of customers because its service would simply be better. That comment sent shares of AT&T, Verizon, and T-Mobile falling the following day.As of June 30, Starlink had 12 million subscribers and more than 10,200 satellites providing coverage across 167 countries. While SpaceX’s rockets and AI work tend to dominate headlines, its connectivity business is actually its largest revenue driver, accounting for 55% of total sales.
The cost problem
Becoming a genuine fourth major US mobile carrier would require significantly more terrestrial infrastructure to match a traditional cellular network’s capacity — a build-out one analyst estimated could cost SpaceX more than $100 billion. SpaceX’s alternative: installing small cellular base stations alongside Starlink dishes at homes and businesses, adding ground-based capacity where satellite alone falls short, without building a sprawling cell tower network. Musk claims these stations could eventually deliver connectivity directly to phones with better and higher bandwidth than existing carriers offer.
Why Stankey says the math doesn’t work
Stankey argued that installing enough small stations to match a traditional network’s capacity would cost roughly the same as building a full macro cellular network. He also flagged a regulatory hurdle: current law doesn’t allow radiating cellular signals from someone’s home without their permission, unless the law changes. If the approach were genuinely viable, he argued, AT&T would already be doing it on its own fiber network. SpaceX did not respond to a request for comment.
Analysts remain skeptical too
Bernstein analyst Madison Rezaei wrote that cell towers aren’t going anywhere soon, even if Musk gets creative, citing technical hurdles extending satellite coverage indoors, limited brand awareness, and customer reluctance to switch carriers. She suggested Starlink Mobile could fill a meaningful gap in remote, rural, maritime, or disaster scenarios, but remains a long way from replacing terrestrial carrier networks. operators’ brands. She said Starlink Mobile could prove valuable in rural, remote, maritime and disaster-response scenarios but remains “a long way” from replacing terrestrial cellular networks.Despite the scepticism, the growing confrontation between SpaceX and established telecom providers highlights how satellite-based connectivity is increasingly moving into territory historically dominated by mobile network operators. As both sides invest billions to shape the future of communications, the battle between fibre, cellular networks and satellite internet appears set to intensify.
