T-Mobile, SpaceX get FCC approval to expand coverage to dead zones

The news: The Federal Communications Commission (FCC) approved T-Mobile and SpaceX’s plan to offer direct-to-cell satellite service.

• The partnership equips T-Mobile’s network spectrum with SpaceX’s Starlink satellites and aims to eliminate more than 500,000 square miles of mobile “dead zones” in remote areas.
• Objections filed by competitors including Amazon’s Kuiper, Omnispace, and AT&T were rejected by the FCC.

The background: T-Mobile and SpaceX first started looking for a license in 2022, with plans to get Starlink service on phones the following year. This is the first time the FCC has agreed to let a satellite operator supplement a phone provider’s coverage.

• The new service differs from Apple’s satellite offering, which only kicks in when there is no other service or Wi-Fi available and can only send iMessage or SMS messages.
• In October, Starlink received emergency approval to provide coverage for US regions that lost service due to Hurricanes Helene and Milton.

Zooming out: Industry consolidations, layoffs, and extreme weather events have contributed to several mass outages this year, and the telecom industry’s reliance on a handful of leading providers can make them harder to promptly fix.

• In February, thousands of AT&T, Verizon, and T-Mobile consumers reported prolonged service outages.
• More than 100,000 Verizon customers experienced internet and cellular network outages in late September.

Satellites can help improve connectivity and ensure emergency services are reachable even in the most remote locations.

What’s next? The FCC requires that SpaceX makes sure that direct-to-cell doesn’t interfere with ground services. On the business front, the partners need to determine how the offering will be priced and made available.

SpaceX said its satellites can work with Samsung, Apple, and Google devices and can send and receive messages across SMS, X, and WhatsApp. The company plans to support voice and web browsing “over time.”

Our take: While this approval is a big win for SpaceX and T-Mobile, the potential for operating costs to be passed onto consumers could limit mass adoption. Expanding the service to users beyond T-Mobile could increase coverage and effectiveness in crisis situations.

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