SpaceX threatens telecom and cable giants

SpaceX’s IPO has raised $75 billion in proceeds, with an enterprise value of over $2 trillion and a total addressable market of almost $29 trillion. The company’s valuation is driven by its space-based data centers and moon bases, but its more immediate impact may be felt in the telecom industry.

SpaceX’s Connectivity Segment

SpaceX’s Connectivity segment, which operates under the Starlink brand, provides broadband and in-fill mobile voice & data services to consumers in remote areas. The segment generated $3 billion in free cash flow in 2025, with almost 9 million broadband and over 6 million mobile global subscribers.

In comparison, the 5 largest US telecom & cable players generated almost $111 billion in free cash flow and had approximately 95 million broadband subscribers and 275 million mobile postpaid subscribers. However, SpaceX’s controlling shareholder and CEO, Elon Musk, has proven himself to be a visionary with ambitious plans to launch 10,000 next-generation V3 satellites from late 2026.

Impact on the Telecom Industry

These satellites will have 1 terabit of capacity, 10 times the capacity of the current V2 satellites, and will boost current median download speeds to levels comparable to fiber and cable terrestrial alternatives. This will allow pricing to come down, posing a risk to incumbent operators, who may try to lock in their bases via converged broadband and mobile bundles or cut their standalone broadband pricing.

The US cable operators, such as Comcast and Charter, are most exposed to this risk, with their equity having fallen approximately 30% and 70% in the last year, respectively. However, Musk may not stop at disrupting the broadband market, and could potentially counter the incumbents’ counter by going mobile.

SpaceX’s “direct to device” (D2D) service is currently seen as a complementary in-fill service, but Musk may have bigger plans.

Potential Acquisitions

Alternatively, Musk could consider going mobile.

From an industrial perspective, towers look well-positioned, as demand for space on the towers will increase if the US goes to four networks, or at least remain steady if SpaceX acquires an incumbent. Geographically, Europe’s lower pricing, SpaceX’s lack of terrestrial spectrum, and higher urban and MDU density make it a much harder market to attack.

European telcos, which have long played second fiddle to their US counterparts, may now be thankful for the harsh regulation and geopolitical risk they previously faced, as they may be insulated from the potential disruption caused by SpaceX’s expansion into the telecom industry.

As the telecom industry continues to evolve, it will be interesting to see how Musk and SpaceX handle the challenges of regulations, partnerships, and acquisitions. One thing is certain, however, and that is that the status quo will not remain unchanged. The telecom industry is changing.

SpaceX is driving this change, and its impact will be significant. The company’s plans for expansion will likely lead to a new setting in the telecom industry.