SpaceX wants access to at least 80,000 US cell sites for its planned mobile network. Kelcee Griffis reported this for Bloomberg on 22 October. The company is in talks with at least one big tower owner, Crown Castle, Bloomberg said, citing people familiar with the matter.
The deals would put SpaceX on a path to a fourth nationwide US carrier, after AT&T, Verizon and T-Mobile. Bloomberg said the deals could be worth billions of dollars. TNW has not independently verified the report.
A day before the report, an analyst asked Crown Castle chief executive Chris Hillabrant about leases with satellite firms. SpaceX and Amazon were both named. It came on the company’s third-quarter earnings call on 21 October.
“I don’t think I want to get into customer-specific detail, but you can assume that we’re talking to all parties.” Chris Hillabrant, Crown Castle
Amazon has asked the FCC for its own direct-to-phone satellites. Later, an analyst at New Street Research asked whether SpaceX had approached Crown Castle at all. Hillabrant repeated the same line.
He told analysts that SpaceX’s plans could help Crown Castle in two ways. SpaceX could lease towers directly for its ground network. Its arrival could also push existing operators to spend more on their own networks.
Hillabrant also said Dish had installed equipment on more than 12,000 Crown Castle sites. Dish then abandoned its network, and some of that kit is still on the towers. Those sites have already been through zoning and permitting. He called the network Dish built “the industry cheat code” for a newcomer that wants to move fast.
Musk’s carrier plan
SpaceX has said it wants to sell phone service directly to US consumers. This month it agreed to buy nationwide low-band 800 MHz spectrum. Hillabrant called that purchase a “huge milestone”. Low-band signals reach inside buildings and cover wide areas.
The FCC has also approved 15,000 SpaceX satellites designed to connect directly to phones, Bloomberg reported. Musk set out the ground side of the plan on SpaceX’s quarterly earnings call last week.
“We will be building out our terrestrial networks so there’s broad-based connectivity anywhere that SpaceX and Starlink are allowed to operate.” Elon Musk, SpaceX
How big 80,000 sites is
The target equals half of the 158,500 purpose-built cell towers in use in the US last year. Reuters reported that figure, citing the Wireless Infrastructure Association. Crown Castle runs about 40,000 US towers and American Tower about 42,000. Privately held Vertical Bridge owns about 18,000.
Bloomberg’s report refers to cell sites, not towers, Michael Kan noted for PCMag. The figure is close to what the big three already rent. A March report for the association put T-Mobile at 82,000 towers, AT&T at 75,000 and Verizon at 65,000.
Analysts at TD Cowen estimated that a nationwide ground network would cost more than $80bn and take many years, Reuters reported. SpaceX also plans to send mobile signals from its customers’ home Starlink equipment. Research firm MoffettNathanson pointed out that those sites sit where subscribers live, not always where a network needs coverage.
Shares and doubts
Crown Castle shares rose as much as 10% in late trading after the report, Bloomberg said. Shares in AT&T, Verizon and T-Mobile fell between 4.2% and 5% in extended trading, according to Reuters.
Ken Schmidt, president of Steel In The Air, which tracks cell lease negotiations, doubts the number. Hours before Bloomberg’s report, he and Nick Del Deo of MoffettNathanson held a webinar on Starlink Mobile. Even in the most optimistic case, they felt a ground network would need fewer sites than each big carrier, about 75,000, Schmidt wrote on LinkedIn.
He asked why SpaceX would need 80,000 sites if its direct-to-device satellites give phones what SpaceX calls acceptable service outdoors. He also noted that SpaceX had earlier pointed to rooftop femtocells instead of a ground network.
“I hope Starlink is serious about 80,000 sites; it’s good for consumers, good for the tower industry, bad for the carriers, and good for landowners/building owners. But it seems like exactly what I would do if I wanted to pressure the Big 3 and force one to sign an MVNO deal, too.” Ken Schmidt, Steel In The Air
An MVNO deal would let SpaceX resell access to a carrier’s existing network. Executives at all three carriers have so far rejected the idea, PCMag reported. T-Mobile is already a SpaceX partner, as the exclusive US provider of the first Starlink Mobile service.