SpaceX's Starlink has continued to expand beyond satellite broadband and Direct-to-Device (D2D) services into the mobile communications market, raising growing questions over whether the company could eventually challenge traditional mobile network operators (MNOs) and terrestrial radio access networks (RAN). According to a recent analysis by Dell' Oro Group, SpaceX's long-term ambition may extend beyond using satellites to fill connectivity gaps in remote areas. Instead, the company could gradually build an end-to-end connectivity platform that integrates terrestrial and non-terrestrial networks (NTN).

Notably, during a recent earnings call, SpaceX indicated that it could potentially deploy terrestrial communications infrastructure in the future, using large numbers of small cells in combination with Starlink terminals and leveraging the Starlink satellite network for backhaul connectivity. Such an approach could allow SpaceX to further expand into markets traditionally served by telecom operators.

From Satellite Coverage Extension to Integrated Space-Ground Networks

Dell' Oro believes that SpaceX's move into mobile communications may not necessarily be aimed at becoming another traditional MNO. Instead, the company could seek to control key elements across the connectivity value chain, spanning satellites, spectrum, terrestrial base stations, and end-user devices. Starlink's key advantage lies in its ability to provide broad coverage rapidly through satellites, particularly in markets such as remote areas, maritime and aviation environments, government, and enterprise applications, where conventional terrestrial networks can be costly or difficult to deploy.

At the same time, the rapid development of Physical AI—including AI agents, autonomous vehicles, robots, and drones—could fundamentally change the source of future connectivity demand. Network traffic may increasingly be generated not only by humans using smartphones, but also by large numbers of machines and autonomous systems. As these devices operate across urban, suburban, remote, maritime, and aerial environments, the need for ubiquitous connectivity will become increasingly important and could serve as a major driver of SpaceX's continued expansion in connectivity services.

Satellites Offer Coverage Advantages, While Terrestrial RAN Retains Capacity Density

However, Dell' Oro emphasizes that the ability of satellite networks to address coverage gaps does not mean they can replace the capacity advantages of terrestrial RAN.

Terrestrial mobile networks can deploy large numbers of base stations to divide geographic areas into smaller cells and reuse spectrum efficiently, enabling high-capacity services in densely populated areas with heavy traffic demand. By contrast, satellite beams cover much larger areas and offer less efficient spectrum reuse, making it difficult for satellite networks to handle large volumes of mobile traffic as efficiently as terrestrial networks in densely populated cities such as Tokyo and New York. In addition, the antenna characteristics, transmit power, and battery capacity of conventional smartphones also limit the ability of satellites to provide high-capacity mobile services directly to users.

Therefore, Dell' Oro believes that terrestrial RAN has an advantage in capacity density, while NTN has an advantage in geographic coverage. Rather than simply replacing one another, the two are more likely to form a complementary hybrid network architecture.

Three Major Challenges for SpaceX as It Enters Terrestrial RAN

If SpaceX further expands from satellite networks into terrestrial mobile networks, Dell' Oro identifies three major challenges: physical and capacity constraints, infrastructure requirements, and the mobile communications ecosystem.

First are physical and capacity limitations. Satellites can provide coverage over vast geographic areas, but they cannot reuse spectrum as efficiently as terrestrial base stations in densely populated areas.

Second are spectrum and terrestrial infrastructure. Traditional MNOs have spent decades building extensive networks of base stations, spectrum resources, fiber backhaul, and network operations capabilities. Even if SpaceX deploys large numbers of small cells connected through Starlink terminals, it would still need to address issues including radio-frequency planning, indoor coverage, mobility and handover management, interference coordination, and spectrum regulation.

Third is the broader mobile communications ecosystem. Traditional MNOs already have established capabilities covering subscribers, devices, roaming, authentication, billing, customer service, and regulatory compliance. If SpaceX moves deeper into the terrestrial mobile market, it would need to build or integrate a comprehensive mobile communications ecosystem beyond network connectivity itself, while also navigating spectrum and regulatory frameworks in different countries.