Starlink’s Entry Into Wireless Is Being Wildly Overhyped

One of the ways Musk fraudulently goosed SpaceX stock value during the IPO was by pretending that the company would very quickly (in just a year or two) grow from just 12 million global Starlink subscribers (just 4 million in the States) to something more akin to 300-500 million.

The way Starlink claims they’ll do this is by getting into traditional wireless phones and challenging incumbents like Verizon, though if you look at the actual details of the plan, it’s not well thought out.

Starlink wants to plunk down thousands of meshed femtocells installed on customer rooftops alongside existing LEO satellite dishes, something one telecom analyst recently stated was “one of the top three dumbest ideas in my four decades of being in this industry.” In part because the femtocells will eat up already dwindling capacity on the increasingly congested network (recall that Starlink customers in some areas already face “congestion fees” as high as $1500).

Musk Corp is also leveraging its cozy relationship with the Trump administration to hoover up as much spectrum as they can get their hands on. You might recall that Trump FCC boss Brendan Carr launched an “investigation” into Echostar to specifically help offload their spectrum to Musk. SpaceX also recently bought 14 megahertz of spectrum in the 800 MHz band from investment firm Grain Management, which bought the spectrum from T-Mobile earlier in 2026.

Starlink has even managed to pressure some Republicans into supporting broader cell phone unlocking rules, something the party has spent the last few decades helping entrenched telecom giants like AT&T and Verizon fight tooth and nail against.

The recent purchase was enough to send AT&T, Verizon, and T-Mobile stocks tumbling:

“Verizon closed down 8.75% on the news, its worst day since July 2002. Shares of T-Mobile dropped 13.27% while AT&T fell 9.81%, each notching their own worst days since 2013 and 2000, respectively.”

In contrast, the white supremacist’s space company’s stock only jumped around 1 percent for the day.

The problem for Musk is multifold. As Dish Network found when it failed utterly to disrupt the sector, it takes a lot more than spectrum hoarding and some greased palms to become a major player in wireless. Actually building a useful network the public wants to use that covers rural and urban markets alike is a massive cash sink investors despise in part because networks take years to finish.

The highway of telecom history is positively filled with the gravestones of companies that tried to cleverly out-maneuver giant incumbent telecoms, which are directly tethered to the heart of the Republican party (remember Starry?).

Space X and its boosters believe that simply having access to Starlink’s network of Low-Earth orbit (LEO) satellites is some kind of magic wand toward competing in wireless (they’re already partnering with T-Mobile for phone calls in out-of-the-way locations). But even normally staid telecom analysts have been shitting all over Musk’s femtocell plan, pointing out it’s not going to scale well:

“Given the laws-of-physics limitations, a Starlink network of small cells would probably have more holes in it than a hiker’s socks. Neither Lum nor Rhodes sees much likelihood of coverage in urban areas that enjoy mainstream and lower-cost alternatives. “It works best in rural because you’ve got fewer choices for fiber and so most customers are there. Where are your customers to repeat it in the city?” said Rhodes. “Well, they don’t exist because they’re not that stupid.”

There’s also the fact that Musk companies don’t really believe in customer service, and fail in most every instance where they’ve been forced to try. Both Starlink and Tesla Solar are routinely inundated with stories where customers can’t even get the companies to respond to phone calls or emails. Starlink also consistently isn’t particularly affordable for the folks most in need of access.

Starlink is (and will probably always be) a good niche broadband solution best suited for people out of reach of better, faster, more affordable options if they can afford it (rural homes, boats, RVs, wars, disasters). But Musk and Republicans have broadly tried to claim that the technology is some sort of magic bullet for connectivity. To the point where they redirected what ultimately will likely be billions of infrastructure bill taxpayer dollars away from faster fiber networks to Starlink.

The actual threat to giants like AT&T and Verizon is limited, though outlets like CBS buried that fact deep in their bullish reporting. Even a best case scenario requires a massive outlay of capital and a half a decade to even get close to begin trying to compete in the space, something SpaceX’s more reality-based investors definitely aren’t going to enjoy.