AT&T and T-Mobile CEOs Criticize Elon Musk’s Starlink Mobile Plans
AT&T CEO John Stankey has openly sided with T-Mobile’s CEO, Peter Osvaldik, in dismissing Elon Musk’s vision of transforming the Starlink satellite service into a major player in the mobile phone market. In an interview with Axios, Stankey stated that SpaceX’s idea to create a global rival to conventional telecom networks is not practical. He emphasized that fiber internet is far superior, highlighting AT&T’s recent $3 billion deal with Corning to expand its fiber optic services.
Osvaldik had previously expressed his skepticism about Musk’s plans, saying they deserved to be laughed at. He pointed out that Starlink’s model does not have the necessary scale or economics to compete with established telecom providers. This reflects a broader skepticism about Musk’s ambitions within the industry.
T-Mobile’s Concerns
T-Mobile’s CFO, Osvaldik, was straightforward in addressing Starlink’s mobile plans, claiming that experts in the field find parts of Musk’s proposal hard to believe. He argued that satellite signals face significant challenges, such as their inability to penetrate walls and buildings, which limits their effectiveness in city environments compared to rural areas where satellite coverage excels.
AT&T’s Fiber Advantage
In the same Axios interview, Stankey confidently defended AT&T’s position by discussing the company’s infrastructure investments. He pointed out that fiber offers speeds that are significantly faster than satellite technology. He asserted that even in the best-case scenario for satellite technology over the next decade, it will still lag behind the performance of fiber.
Growing Competition
The strong objections from both CEOs come as Musk and SpaceX President, Gwynne Shotwell, have begun to articulate a vision for Starlink that directly competes with traditional telecommunications. Currently, Starlink is already vying for customers in the home and business internet service sectors, and it is making strides towards launching mobile services that would challenge established wireless carriers.
During a recent earnings call, Shotwell claimed that Starlink could attract many customers from existing providers, causing stocks for AT&T, Verizon, and T-Mobile to drop the following day.
Starlink’s Expansion Plans
As of June 30, Starlink boasted 12 million subscribers, supported by over 10,200 satellites delivering coverage across 167 countries. Though the company is widely recognized for its rocket and AI developments, its connectivity division is actually its major revenue source, contributing 55% of its total earnings.
However, becoming a prominent mobile carrier in the U.S. would demand extensive ground infrastructure to rival traditional cellular networks, which could cost more than $100 billion, according to analysts. To tackle this, SpaceX has proposed using small cellular base stations alongside Starlink dishes at homes and businesses, which they believe could enhance service in areas where satellite connections may fall short.
Skepticism About The Plan’s Viability
Stankey was critical of this idea, arguing that equipping enough small stations to match the capacity of a conventional network would cost roughly as much as building a full cellular system from scratch. He also highlighted significant regulatory challenges, noting that current laws prevent companies from broadcasting cellular signals from a person’s home without explicit permission. He concluded that if this method were truly practical and cost-effective, AT&T would already be utilizing similar technology in its extensive fiber network.
