While the demise of EchoStar as the fourth major mobile operator in the US would seem to lessen competition, LightShed Partners analyst Walter Piecyk postulated it could lead to a mobile play by SpaceX.  

Piecyk stated on LightShed Partners’ site a decision by EchoStar to decommission its open RAN network and convert Boost Mobile to a hybrid MNO running on AT&T’s network “is just the first step and the process is far from complete”.

He noted AT&T’s $23 billion deal to buy EchoStar’s 3.45GHz and 600MHz spectrum licences excluded the latter’s AWS-4 spectrum which is coveted by SpaceX.

FCC chair Brendan Carr appeared to take up SpaceX’s spectrum cause in May, when he met with EchoStar co-founder and chair Charlie Ergen and President Donald Trump to discuss spectrum rights.

Piecyk stated Carr played a “critical role in helping to resolve the EchoStar mess”, but noted “there is much more work to be done and Carr will continue to play a lead role”.

“Regardless of who ends up with EchoStar’s remaining spectrum, there is an opportunity emerging for SpaceX to enter the mobile wireless business in the US.”

“SpaceX’s strong brand and the perception that Starlink can deliver ubiquitous coverage position Elon Musk to credibly enter the US wireless market.”

He explained with industry margins approaching 60 per cent, “the sector is an attractive target for new competition, particularly from a player with Musk’s scale and consumer reach”.

Grease
Piecyk suggested the FCC could smooth SpaceX’s mobile path by securing favourable wholesale terms for an MVNO arrangement, which would lower the barrier to entry.

“Musk could pursue such a deal directly with EchoStar, which continues to discuss launching its own LEO constellation, or deepen SpaceX’s existing partnership with T-Mobile [US], where the companies are already collaborating to extend satellite coverage to mobile subscribers.”

Either avenue could employ SpaceX’s reputation for innovation “to challenge incumbents in a market that has long been defined by high margins and limited disruption”.

“Can you imagine a Starlink phone hitting the market powered by a Grok Assistant?”

With EchoStar expected to sell more of its spectrum, the analyst speculated the administration of President Trump could take an equity stake as part of a broader resolution.

“Such an outcome could also further strengthen Commissioner Carr’s standing with Trump by demonstrating his ability to deliver another strategic minority stake into the US coffers.”