MediaTalk | Season 4 | Ep. 33 - The Future of Mobile: Satellite Readies its Challenge

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Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with S&P Global Market Intelligence's tech, media, and telecom news team. Welcome to MediaTalk, a podcast hosted by S&P Global, where the news and research staff explore issues in the ever-changing media landscape.

Today I'm joined by a returning guest, Lynnette Luna. Lynnette is a senior research analyst in the Kagan Media Research group within S&P Global Market Intelligence. She leads coverage of the US consumer mobile and tower markets.

How are things in the Denver area today, Lynnette?

Lynnette Luna: Hot. But thanks for having me here today. I appreciate it.

Reynolds: All right. We appreciate you coming back to MediaTalk's virtual studio. Lynnette's always a busy lady, and we're going to ask her to share her thoughts and industry wisdom about Elon Musk's Starlink plan in the mobile arena.

That stems from Starlink's leadership position in the burgeoning direct-to-device realm. Then she's going to catch us up to speed a little bit on the big three mobile players as they've applied new metrics among the industry's maturation. And finally, she gives us a scorecard on how T-Mobile, Verizon, AT&T, and maybe cable players Charter and Comcast fared financially in the second quarter.

Ready to roll, Lynnette?

Luna: Yes. Thank you.

Reynolds: All right. Before we get to Musk, let's start with direct-to-device, or the D2D arena. Lynnette, can you set the stage for us there?

Luna: Yes. It's about the hottest topic in wireless right now. So it started back in 2022 when Apple established the consumer market through a partnership with Globalstar and launched an emergency SOS via satellite.

And then it expanded satellite-enabled features across subsequent iPhone generations. And then of course Starlink's been in the picture, and there's all sorts of other players that really just want to drive satellite connectivity. It's part of 6G as well, where it's going to be one of the communication platforms for the next generation.

Reynolds: And SpaceX, Starlink, it's the leader here?

Luna: Yes. It's following a kind of a public beta involving 2 million users with T-Mobile. T-Mobile was one of the first carriers to work with Starlink. Back in July 2025 it launched it commercially. Now I think it charges $10 a month as an add-on.

We don't know exactly how many customers stayed and want to pay for that. But it has subsequently partnered with carriers across the world doing the same type of thing. Some of them are a little different, like in Canada. It's really helping to expand coverage since the population is so sparse there.

And then SpaceX has been a little more aggressive in the US. It's strengthened its position through acquiring EchoStar's AWS and H Block spectrum assets to complement its direct-to-cell satellites. So they kind of position Starlink as the first large-scale commercial D2D platform operating in the United States.

Reynolds: So SpaceX, record IPO, maybe some of the bloom is off that rose a little bit. Still, lots of proceeds and investment. And MediaTalk listeners are interested in Starlink maybe trying to become a major player in terrestrial network and become a major mobile carrier, but you don't think so.

Luna: The speculation has been going on for a long time. People thought maybe it would buy T-Mobile, or that it would partner with somebody, or that it might bid in the C Block auction, which it could. Although there's rules that keep it from marrying that spectrum with satellite. But what it came out with in its second quarter earnings was that it wanted to build a terrestrial network using small cells mounted on existing rooftops with Starlink dishes.

And so the vision is a hybrid network to combine space-based coverage and ground nodes to compete against carriers. They kind of explained that they'll deploy these small stations as needed, letting the grid expand dynamically where mobile traffic demand is highest. This is really unproven, so I—

Among the problems I see, I'm not going to take forever to list them all, but there's kind of a physics problem here. The biggest flaw in a satellite-only mobile network is capacity density. Terrestrial operators use thousands of cell towers in a single city. And each tower serves just a few blocks, so they get massive dedicated bandwidth to split among the smaller pool of users.

A Starlink satellite beam covers thousands of square miles, so every single smartphone user inside that massive footprint has to share the exact same satellite connection. A satellite over a remote desert can easily give a few stranded hikers great speeds. Putting the same satellite over New York City or Los Angeles results in the network collapsing under the data load of millions of phones.

Everybody's like "Elon Musk is super smart and could overcome this." Hey, maybe. Possible. Indoor penetration is huge. Radio signals coming from a satellite 340 miles in space use incredibly weak power by the time they reach the Earth. So these signals can connect to a phone outdoors with a clear view of the sky.

They struggle heavily to penetrate concrete walls, metal windows, basements, subway tunnels.

Reynolds: I think you've written before, we've talked about this before. So you think he can work in rural or less densely populated areas, but he's not going to be an urban factor this way?

Luna: No, I don't think so. Land-based operators solve this by placing small cells and micro towers inside buildings. So unless he wants to, if that's part of the plan in the future, we'll see. All right. The rooftop dish plan—attaching small cellular nodes to millions of home internet dishes.

Most people buy Starlink home broadband in rural, sparsely populated areas. It's not a place, it's not a service they typically buy. You can get fiber in urban areas, and that's where 80% of mobile data is consumed, in urban and suburban neighborhoods. So there's not a huge, dense existing grid of urban dishes there.

And then lastly, I think it's the regulatory and interference nightmares. It wants to use the newly bought spectrum right from EchoStar. And it has very strict regulatory approval, so incumbent carriers are already filing complaints with the FCC, arguing that Starlink's high-powered direct-to-cell signals will cause severe radio interference.

And there is a no tolerance rule there where Starlink would have to end operations immediately if it actually is causing harmful interference.

Reynolds: What about, let's go outside the US. What's the possibilities there for Starlink and SpaceX?

Luna: They really have to rely on partnerships in other countries, because they don't own any spectrum outside the US.

Reynolds: Okay.

Luna: And there's varying regulatory rules that govern satellite to terrestrial communications. And so it would have to be, like, a case-by-case basis internationally.

Reynolds: All right. You mentioned briefly perhaps partnerships. Maybe I think you discussed something about Charter, and was there a movement at one time that Musk wanted to buy T-Mobile?

Luna: Yeah. That was, like, everything floating around in the universe about how it could possibly become a mobile operator.

Reynolds: I gotcha.

Luna: And one was possibly a deal with Charter to use a lot—they rely heavily on Wi-Fi for a lot of their indoor coverage and a lot of outdoor coverage as well.

And then when they don't have Wi-Fi coverage, they rely on an MVNO agreement with Verizon and I believe T-Mobile for some of them. So that would violate—they would just have Wi-Fi. That would violate probably terms of an MVNO deal with those carriers.

Reynolds: I gotcha. Okay.

Luna: Since they don't want to partner with SpaceX.

Reynolds: No, I wouldn't imagine they do. Yeah. I wouldn't imagine they want to. All right. So that's SpaceX and Starlink and Musk, but there's a lot of other activity that you guys just chronicled in the D2D space.

Luna: Yes. So there's lots of competition. They're all behind SpaceX but, Amazon bought Globalstar for over $10 billion, or is buying, which is a great way to control the company's LEO satellites.

They have all of the regulatory relationships so they could do a ground-based service without having to partner with carriers and negotiate for permission to use airwaves. So they have a really good advantage, but they also need to modernize their satellites to enable this.

Rocket Lab bought Iridium, and I believe I read this morning that they've just launched new satellites to enable D2D. But they will also keep kind of the existing business, serving government and maritime and IoT markets, which it has historically focused on. And then there's AST SpaceMobile.

Carriers really like them because they want to partner with them. They center on enabling carriers to extend their terrestrial networks through wholesale satellite capacity, and it already has agreements with about 60 carriers worldwide, including AT&T and Verizon. And they support both consumer and enterprise broadband connectivity.

And deployment delays, though, have pushed this back into 2027.

Reynolds: Okay, so that's next year. What about Skylo Technologies? It became one of the first commercially deployed standards-based NTN providers. What is Skylo up to?

Luna: They have emerged as one of the first commercially deployed standards-based NTN providers.

So it's based on newer standards that incorporate satellite with mobile connectivity. And they partner or lease capacity from other satellite operators like ViaSat and TerraStar, and they are operating across five continents, providing D2D satellite connectivity for smartphones, automotive systems, and IoT devices.

Reynolds: So the other side here is that the three big mobile players in the US, they've taken a step as a group here, right?

Luna: Yes. So yeah, the competitive dynamic shifted, which probably angered SpaceX and caused it to move in this whole direction of trying to compete with them. They didn't want to rely on proprietary integrations with individual satellite operators like Starlink. And so they intend to, or they're working on establishing a shared technical specifications capable of supporting multiple satellite providers.

So they are aiming for kind of a broader transition away from exclusive bilateral agreements toward this interoperable D2D ecosystem, which I think would allow them to continue to control their own customers. So by creating kind of a platform where they are in charge instead of giving way to companies like Starlink.

Reynolds: I gotcha. All right. A lot of developments here, including Musk moves, and a lot to keep our eyes on. Let's shift over a little bit to the key mobile players and their financial performances. Lynnette, you said last time when you were going through the first quarter, they shifted goalposts on you.

There's new metrics at play. Can you give us an overview as this is, of course, the industry's getting a little bit more mature, harder to come by new subscribers?

Luna: Yes, so they want to focus on accounts, so how they're growing accounts basically.

All right. And that's a big one is T-Mobile, which stopped reporting postpaid phone additions, which, that's the way the industry has really evaluated this market for so long in terms of growth. And now, they really want investors to start focusing on account growth, not necessarily mobile.

It could be mobile and broadband together. Anything that you can throw into an account, so they really want you to focus on average revenue per account and how those accounts are growing. So T-Mobile was pretty much the most aggressive one there. And they think that it better reflects the value of a customer relationship than individual subscriptions.

But it can also hide a lot of things that are happening because when an account maybe is growing slower, does that mean that its mobile additions are growing slower? Or what is it?

It's hard to understand if something is growing or declining and what segment of it is.

Reynolds: Yeah. You have to really parse through the composite there I get it. What about Verizon? They made some changes too?

Luna: Yeah. They were a little more subtle. They still report wireless subscriber metrics, but they don't report wireless revenue as a standalone financial, so we have to estimate that.

They increasingly emphasize mobility and broadband service revenue just like T-Mobile has. And retail postpaid accounts, they do reveal, and retail postpaid account additions and ARPA.

Reynolds: How about AT&T? I think you wrote that they made the fewest changes, the easiest to track, but yet there's still some complications.

Luna: Yes. They increasingly framed its business around convergence and the combination of wireless and broadband, so it's largely preserved the traditional wireless reporting. But it's still a challenge because they increasingly ask investors to evaluate its fiber plus wireless strategy, but it only provides limited visibility into the economic value of converged customer relationships.

So investors can see wireless and fiber growth independently, but they have fewer tools to really measure how convergence affects customer value, retention, and monetization.

Reynolds: All of that being said, second quarter's in the books. What were you able to discern if you went to the top? We'll start with T-Mobile.

Luna: Yeah. I think AT&T took the wireless crown in terms of postpaid phone additions is what I'm guessing at this point. I haven't put in the whole calculations and estimates, but AT&T came up with 432,000 postpaid phone net additions, and they really easily outpaced Verizon with 184,000.

Reynolds: Okay.

Luna: And we really think that maybe T-Mobile cooled, because that is part of its strategy. It increased prices, and it really chose to focus more on profitability than growth. Part of the reason why it pivoted to a new reporting system I believe. But AT&T really showed that its fiber internet is the biggest weapon for selling mobile plans right now. It reported that 42.5% of households with AT&T fiber and home internet chose AT&T Wireless. So they really have been aggressive in selling packages that way.

Reynolds: Okay. All right. Is there anything in terms of what Verizon might have done that we should be looking at?

Luna: Yeah. So Verizon has struggled with consumer growth for quite a while.

So this was its best consumer postpaid phone performance in about five years, 184,000.

Reynolds: Really? Okay.

Luna: So it's really shifting its focus from raw device equipment sales and really banking heavily, just like the other two, on steady broadband growth and really lots and lots of cost cutting. We've seen massive layoffs in the last several months.

Reynolds: Yeah. Unfortunately, that seems to be not limited to this particular industry. Anything that T-Mobile you were able to extract?

Luna: Yeah. It really aggressively beat earnings expectations but it didn't earn that by adding new customers. It successfully migrated users to more expensive premium plans. So ARPA jumped. Average revenue per account jumped about 2%, and I think management noted that about 60% of new signups were opting for their highest priced services. It will, and it always has, caused a temporary spike in churn. And I think management thinks that will happen continually in the third quarter as well.

Reynolds: Okay. All right, let's go to the cable guys. Broadband, their high margin business has stagnated for a while. And they're increasingly looking to mobile to raise the stakes.

Luna: Yeah, definitely. I think I saw that revenue fell for all of them overall. But wireless growth was positive. And they're doing this by offering free to paid step-ups.

They're offering this by offering free lines which aren't free forever. They are 12-month promotional incentives, but they're hoping then that turns into paying customers. So a lot of their growth is powered by these free lines. And hopefully they'll be converted into standard paid lines.

They also have their, when a customer's lured in by one free promotional line, they frequently bring the rest of their family with them. So line one might be free for the year, but lines two, three, and four are fully paid from day one.

Reynolds: Okay.

Luna: And then a lot of them are expanding into the enterprise sector, that's a massive new revenue driver for both Charter and Comcast into mid-size and large business accounts. They previously were in there before.

Reynolds: We're getting to the end here, Lynnette. So again, as you look at second quarter, just any overarching themes?

Luna: Yeah, I think we saw new CEOs come in last year and say, "This is what I'm going to do," and they are executing. T-Mobile's new CEO has been focusing on driving profitability rather than acquiring new customers. Verizon's CEO has really been focusing on cost-cutting and just righting the ship there and they finally reported some very positive phone adds.

And then, AT&T's still going by its playbook of heavy convergence. It's an interesting shift for 2026.

Reynolds: All right. That concludes this episode of "MediaTalk." I want to thank our guest, Lynnette, for spending so much time with us, sharing her knowledge about an increasingly complex mobile world. Appreciate you being here, Lynnette.

Luna: Thank you for having me. I appreciate that.

Reynolds: This is Mike Reynolds. Thanks to all of you for listening. We'll catch up soon on the next installment of "MediaTalk."