SpaceX has disrupted the satellite industry. Now, its Starlink unit aims to do the same with America's telecom giants.
SpaceX President Gwynne Shotwell at a meeting with investors earlier this year talked about potentially building out a network on the ground to provide mobile service, people familiar with the matter said.
Those discussions build on earlier thinking inside the company about Earthbound systems it could pair with satellites to go after the mobile market. Years ago, SpaceX had considered partnering with a U.S. telecom company with ground infrastructure to operate a mobile network in addition to developing its own terrestrial systems, people aware of those talks said.
The company has developed a prototype handset it recently showed to some investors, The Wall Street Journal reported. Many telecom executives and investors have speculated for years about whether the company would offer some sort of phone that could tap its satellite links.
SpaceX's effort to target mobile subscribers is nascent, and taking on incumbent carriers for mobile subscribers would pose tough challenges for the Elon Musk-led company. AT&T, Verizon and T-Mobile US have powerful consumer brands with expansive ground infrastructure supporting their offerings.
Starlink is the financial engine for SpaceX, providing Musk with firepower as his company pursues expensive, futuristic projects. The six-year-old service has around 10,000 satellites and counted more than 10 million Starlink home-broadband subscribers at the end of March.
For years, Starlink's bread and butter has been providing home broadband, a product that has taken off in many rural areas that aren't served well by fiber-optic cables. It has built a big business connecting ships and aircraft.
Starlink has been developing a mobile unit, striking agreements to use its satellites to provide limited service on phones for subscribers of carriers when they are in remote areas. In the U.S., it partnered with T-Mobile to provide such links.
Inside SpaceX, engineers have been working on upgraded Starlink satellites to provide mobile connections.
The company also has been amassing wireless spectrum to support its ambitions. It recently participated in an auction run by the Federal Communications Commission, to gain two cellular licenses, spending $8.5 million. Last year, it agreed to acquire spectrum from another satellite company in deals valued at more than $20 billion.
Starlink, as a satellite service provider, faces limits in serving cellphones. Satellite connections have slower speeds and performance on phones now. Analysts say SpaceX would need a ground network to provide links to locations satellites can't service well, like inside of buildings or tunnels.
Terrestrial infrastructure "is the best connectivity and speed and everything by far and away," Verizon Chief Executive Dan Schulman said at a conference in March.
SpaceX didn't respond to a request for comment. The Financial Times earlier reported on Shotwell's discussions with investors.
Top leaders at SpaceX believe the mobile opportunity is even bigger than providing Wi-Fi in homes.
"I think more than half the population -- the global population -- has a cellphone," Shotwell told CNBC during a recent interview. "I think the numbers of users of Starlink mobile will far exceed our Starlink broadband."
Traditional telecom providers rely on cell towers and fiber so consumers can call, text and stream. Those assets often provide relatively cheap links, and often efficiently pipe large amounts of bandwidth for always-on subscribers.
Musk has a history of moving into what he sees as static industries that aren't innovating.
Case in point is how the company remade rocket launching, going from a startup to powerful incumbent. SpaceX also aggressively built up its satellite communications business with Starlink, upsetting executives who both rely on SpaceX rockets and compete with the internet service.
Some investors expect SpaceX to mount a similar challenge to the telecom industry. SpaceX's expansion of Starlink has whipsawed satellite stocks in recent years, and its plans are being closely watched across the telecom industry.
"It's like with Tesla: if they can't find the car seat they want from a supplier, they'll just go out and make their own car seat," said Walt Piecyk, a partner and telecom analyst at LightShed Partners.
Write to Micah Maidenberg at micah.maidenberg@wsj.com and Patience Haggin at patience.haggin@wsj.com
(END) Dow Jones Newswires
July 02, 2026 08:00 ET (12:00 GMT)
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