SpaceX buys low-band spectrum because satellites alone cannot reach indoor phones
An analyst told The Verge SpaceX needs ground infrastructure for phones and indoor coverage, and the big carriers will not offer it wholesale access.
By
Naomi Adeyemi
In brief
- SpaceX agreed to buy a large block of low-band spectrum to expand the Starlink network.
- The new 800 MHz licences trace back to the old Nextel service and passed through Grain Management.
- Analyst Walter Piecyk says satellites alone cannot cover phones indoors.
- He adds that AT&T, Verizon and T-Mobile will not sign a wholesale deal with SpaceX.
Satellites work well when a dish sits on a roof. A phone in a living room is a different problem, and that gap explains why a rocket company is spending like a telecom giant. In a conversation on The Verge’s Decoder podcast, Walter Piecyk, a partner and analyst at LightShed Partners who covers tech, media and telecom, laid out the logic behind SpaceX’s plan to become a major wireless carrier.
The bet: own the ground as well as the sky
The Verge says SpaceX agreed to buy a big chunk of low-band spectrum to expand Starlink, frequencies that have changed hands across the telecom industry for decades. SpaceX’s stated aim is to use them to help build “the world’s most advanced mobile network.”
Piecyk’s argument is that this is less a luxury than a necessity. Phones lack the power of a rooftop dish, and indoor use demands stronger coverage. Low-band spectrum travels further, he says, which is why it is the foundation of a terrestrial network. He also points to the FCC approval of SpaceX’s earlier EchoStar spectrum purchase, which in his reading implied the company could not do the job by satellites alone.
Two purchases, one direction
The EchoStar deal came first, agreed last year according to The Verge. Piecyk describes a company that learns as it goes: SpaceX bought some spectrum, received a positive reaction from investors, went back to EchoStar for more, and then moved on to the 800 MHz block. Satellite operators, he notes, do not usually pay for spectrum, so this marks a shift in how Starlink was originally built.
A band with a long paper trail
The 800 MHz licences come from Nextel, the old push-to-talk, walkie-talkie service. Sprint had to give them up as part of its sale to T-Mobile, and they were sold to Grain Management before SpaceX bought them.
Piecyk adds a second layer. As a condition of that merger, the government required T-Mobile and Sprint to sell low-band spectrum to EchoStar, so that Dish, under CEO Charlie Ergen, could serve as a fourth competitor. Ergen could not afford the purchase, which forced T-Mobile to put the spectrum up for auction.
Why the incumbents are not an easy way in
SpaceX could in theory have leaned on existing networks. Piecyk says the telcos will not give it a wholesale agreement, leaving it to build its own. Low-band spectrum, he explains, is what carriers with the lowest customer churn rely on for coverage.
As for the rivals, he says AT&T, Verizon and T-Mobile cannot really use the 800 MHz block because of limitations he does not detail, though in hindsight Verizon or AT&T might have been better off paying roughly $8 billion for it.
The earlier coverage on this site looks at the spectrum purchase itself. Piecyk’s account adds the telecom history behind it: the licences were available because a merger remedy failed, and SpaceX stepped in once Starlink’s plans for phones became clear.
Photo: John (Giannis) Tekeridis / Pexels
