SpaceX MVNO deal is the wireless fear hanging over AT&T and Verizon
Analysts say Starlink faces steep technical hurdles, but an MVNO pact with a major carrier could change the wireless fight fast.
By Frankie Delgado · News Reporter
3 min read
A SpaceX MVNO deal is the scenario keeping telecom investors on edge, even as analysts and wireless executives argue Elon Musk’s Starlink is far from building a full U.S. mobile network on its own.
Since T-Mobile and Sprint combined in 2020, the U.S. wireless market has been led by three national giants: T-Mobile, Verizon and AT&T. MarketWatch reported that concern has grown since SpaceX’s May IPO filing described broader ambitions for Starlink Mobile in suburban and urban markets, not just rural service.
The worry is not that satellites suddenly replace cell towers. Analysts cited by MarketWatch say that would require years of spectrum buying, heavy spending and technical catch-up. The sharper fear is that one of the big carriers rents SpaceX access to its network, letting Starlink sell mobile plans without building the whole thing itself.
Could SpaceX get an MVNO deal?
An MVNO, or mobile virtual network operator, buys capacity from an established wireless carrier and resells service under its own brand. Budget wireless brands use that model because it lets them skip the cost of building a national network.
MoffettNathanson analysts said the big three carriers appear to have a shared incentive to avoid giving Starlink that kind of opening. If one carrier signed such a deal, SpaceX could gain terrestrial coverage quickly and compete more directly for U.S. wireless customers.
Julie Zhu, a senior research associate at MoffettNathanson, told MarketWatch the setup resembles a prisoner’s dilemma: the partner might lose less than its rivals, but the whole industry could suffer if a price-cutting competitor gets in through the side door.
The fear has shown up in share prices. MarketWatch reported that since SpaceX filed its IPO paperwork in May, AT&T and Verizon shares have each dropped 8%, while T-Mobile is down 10%. Morningstar analysts said they suspect Starlink worries have played a major role in the pressure, though carriers also face higher interest rates and tough pricing competition.
Why satellites alone are a tough sell
MoffettNathanson analysts say SpaceX’s path is blocked by spectrum limits and physics. Even after SpaceX paid $19.6 billion last fall for 65 MHz of spectrum from EchoStar, the firm estimates the three largest carriers still have about 10 times more low- and midband capacity.
Low-band spectrum reaches farther and passes through walls more easily, while midband carries more data at higher speeds but does not travel as far. Carriers need a mix of both to provide reliable mobile service, according to the research cited by MarketWatch.
MoffettNathanson also said a low-Earth-orbit satellite signal is about 48,400 times weaker than a signal from a ground tower one mile away, before barriers such as walls and ceilings are counted.
Executives at major carriers have played down the threat. T-Mobile CFO Peter Osvaldik told MarketWatch that SpaceX’s direct-to-cell network would not effectively compete with mobile networks. Verizon CEO Dan Schulman told investors on Verizon’s Friday earnings call that physics makes it very difficult for satellite providers to match ground-based broadband service.
T-Mobile already has a Starlink partnership for direct-to-device satellite features, launched in February 2025. Osvaldik told MarketWatch that usage this summer amounted to 0.0003% of total T-Mobile network traffic and was mostly seen outside places such as national parks.
Analysts still see ways SpaceX could apply pressure. Morningstar said SpaceX could use its financial strength to bid aggressively in Federal Communications Commission spectrum auctions. Zhu said that could raise costs for rivals or give SpaceX a bargaining chip.
Wolfe Research analyst Peter Supino wrote that Starlink may try to force its way into mobility, but said it would take years to buy and clear the needed spectrum. He added that unless Starlink acts very aggressively, the big three probably will not provide an MVNO arrangement.
This story draws on original reporting from MarketWatch.