RESOLVING THE LEDGER
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The telecoms industry is all a flutter.
Satellite connectivity was once seen as useful but peripheral. Starlink is changing that.
With scale, money and ambition behind it, the company is starting to look less like a niche rural broadband provider and more like a serious question for the wider connectivity market.
Kester Mann, Director, Consumer and Connectivity at FDM CCS Insight, said this is one of the more interesting developments of 2026.
“The industry is nervous. Operators are currently working to shore up their defenses against potential offerings from a company like Starlink, but the long-term plan is not obvious yet. Starlink has the financial muscle to be disruptive if it wants to be.”
Starlink is clearly a very ambitious business. The recent IPO of its parent company, SpaceX, shattered global financial records, raising $85.7 billion in total capital and valuing the company at $1.77 trillion at listing.
Just weeks after its IPO, the company completed a $25 billion bond sale. One thing it is not short of is money.
The connectivity mix
Clearcut data is somewhat difficult to come across, but the Department of Agriculture puts the total U.S. population in nonmetro counties stood at 46.2 million, accounting for 14% of the total population spread across 72% of the landmass.
This demonstrates why closing not spots in the U.S. has become such a significant challenge.
“It’s very difficult to make connectivity economical in the U.S. outside urban areas,” Mann added. “I understand why we have this situation, and partnerships between telecoms operators and satellite companies make a huge amount of sense.”
The telecoms industry has often envisioned a patchwork landscape for connectivity, with each technology serving the purpose to which it best suits. This works today, mobile, Wi-Fi and broadband interlink nicely, and satellite could fill the spaces left behind by traditional telecoms. Namely, the rural locations.
Could satellite solve the telecoms problem the telecoms industry couldn’t solve?
The economics of telecoms infrastructure have always created a headache for the industry, especially in countries like the U.S.
Simply put, there aren’t enough people living in an area to justify the vast expense of network rollout. If the telecoms operators could have made money, you can bet there wouldn’t be not spots.
This is where a ‘non-telecoms’ solution fits nicely, and there is precedent of new market entrants completely disrupted highly established markets.
Netflix turned entertainment on its head. AirBnB reshaped the hotel industry without ever building a hotel. Uber led to an entirely different way of moving from A to B, and not just taxis anymore.
In the rural states, there are consumer mobile and broadband services to potentially serve, IOT networks to be connected, agriculture and other primary industries to power, not to mention public services just as there are in the cities.
There is a market, just not a financially attractive one. Telecoms operators would have to spend eye-watering amount to cover vast and challenging terrains. It simply doesn’t add up.
Traditional approaches won’t work, so something new has to be considered.
But how much momentum could this give Starlink?
Ambitious businesses set ambitious targets
Starlink boss Elon Musk said in a recent interview he had no intention of putting the telecoms operators out of business, but that has not put all the questions to bed.
Mann continued, “Is rural enough for Starlink? It is a niche service, and Musk has big ambitions. Some analysts are talking about a takeover of a telecoms operators, which is a long shot, but a MVNO proposition could certainly be realistic.”
This is the precarious position telecoms operator find themselves in. Partnerships with satellite companies are attractive, but then it comes with risk.
In the UK, Vodafone and AST SpaceMobile are partnering to bring direct-to-device (D2D) space-based mobile broadband to standard 4G/5G smartphones. This looks attractive to the telecoms operator.
Then you have the middling risk. When Rocket Labs announced plans to acquire Iridium, the deal also included the company’s globally harmonized L-band spectrum and low Earth orbit (LEO) satellite network. This makes Rocket Labs a direct competitor in the rural regions.
Starlink is in a similar position to Rocket Labs, just a couple of factors greater. It has the same operational capabilities and spectrum to deliver consumer services at scale, but it also has cash. Whereas Rocket Labs could be a niche competitor few would worry about, Starlink could be a major disruption.
What is Musk thinking?
Everyone is focused on the disruption to the telecoms industry, but ultimately this might be a by-product of the bigger plan. What if all this routes back to Telsa?
The obvious answer is telecoms. Starlink wants to sell connectivity, operators sell connectivity, so the threat is easy to understand.
But that might also be too narrow.
Musk’s businesses rarely sit neatly inside one industry. SpaceX launches rockets. Starlink sells broadband. Tesla sells vehicles. xAI builds artificial intelligence. X provides the distribution layer. On paper, these are separate businesses. In practice, they increasingly point towards the same idea.
Controlled infrastructure, controlled data, controlled customer relationships .
That is where Tesla becomes interesting.
Where interest matters
A company trying to make autonomous vehicles work at scale does not just need batteries, sensors and software. It needs reliable connectivity in as many places as possible. Robotaxis, logistics, remote monitoring, over-the-air updates, live mapping and future machine-to-machine services all become more valuable if the connectivity layer is controlled rather than rented.
This does not mean Starlink is simply a Tesla project in disguise, that would be too neat, and probably too generous. But it does show why telecoms operators should be c...
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