Telecom Giants at Risk as Starlink's Success Draws Increasing Interest

The dominance of Elon Musk’s satellite business, SpaceX, is expected to disrupt the United States telecommunications industry, which is valued at US$1.6 trillion. This comes as the expansion of Starlink’s satellite internet services continues to grow, potentially eroding the market share of traditional telecommunications players.

In a research note released on Wednesday, brokerage firm Oppenheimer stated that conventional broadband service providers, such as AT&T, are among the parties most at risk of being impacted by Starlink’s growth. Oppenheimer has even raised its global space industry revenue projections for 2035 to US$800 billion, up from a previous estimate of US$500 billion. This revision comes ahead of the highly anticipated initial public offering (IPO) of SpaceX, which is scheduled to take place this month.

Starlink’s expansion is also expected to further pressure cable companies that are already facing a downward trend in subscribers. According to Oppenheimer, several major telecommunications operators, including AT&T, Verizon Communications, and T-Mobile, could potentially experience faster declines in subscriber numbers and revenue in the coming years. The firm assesses that Starlink will further consolidate its position across various essential applications and services, enabling it to reduce customer churn and increase its bargaining power in pricing.

Driven by this optimism, Oppenheimer has raised its projection for the number of Starlink broadband subscribers in the US by 2030 to 15 million, from a previous estimate of 10 million. Beyond the satellite internet business, SpaceX is also seen as having the potential to enter the handheld device market, which is valued at half a trillion US dollars. Oppenheimer suggests that SpaceX possesses the ambition to introduce technology that could ultimately replace the role of the smartphone.

‘If SpaceX succeeds in its mission, this company will become a modern version of the East India Company in the space sector, controlling routes, infrastructure, and trade in a new territory, possessing influence akin to a nation, far beyond that of an ordinary corporation,’ Oppenheimer wrote in its report, as quoted by Reuters.

Previously, Reuters reported that SpaceX is scheduled to list on the Nasdaq exchange on 12 June, targeting a valuation of US$1.75 trillion in the IPO. This massive valuation is largely supported by the Starlink business, which already has over 10 million subscribers worldwide. Furthermore, analysts and investors believe SpaceX’s rocket launch business has fundamentally altered the landscape of access to outer space orbit.