- T-Mobile CEO Srini Gopalan said an MVNO partnership with SpaceX's Starlink doesn't fit the company's criteria for such deals
- Analyst Peter Supino warned that if any of the Big 3 carriers did form an MVNO with Starlink, it would spook telecom investors
- Gopalan praised T-Mobile's existing D2D satellite partnership with SpaceX, crediting the two companies with "inventing the category"
T-Mobile’s CEO Srini Gopalan shot down the idea that T-Mobile would work with SpaceX’s Starlink to create a mobile virtual network operator (MVNO) partnership.
The topic came up when an analyst at the Morgan Stanley Technology, Media and Telecom Conference yesterday asked if T-Mobile would be interested in an MVNO partnership with Starlink.
Gopalan said, “Our philosophy on MVNOs is really clear. We get into an MVNO when we think there's an incremental TAM [total addressable market] to go after. And that could be because of a specific target population, like, you know, an ethnic group. Or it could be because of a specific channel play and distribution, which is why we did the MVNO with the cable players. It's not clear to me how a partnership with Starlink from an MVNO perspective would fit into those criteria.”
Gopalan went on to talk about T-Mobile’s current direct-to-device (D2D) satellite partnership with SpaceX.
He said the technology blows his mind. “Who would have thought four or five years ago you would have flying towers [that] could actually communicate with a moving wireless device?” said Gopalan.
He said it took two teams to make it happen: SpaceX’s Starlink and T-Mobile’s wireless engineers. Gopalan said, “We invented the category with Starlink.”
However, there are probably plenty of other companies that would take issue with Gopalan’s statement: Iridium, for example, which has been doing D2D for years, albeit with proprietary phones and technology.
Gopalan said the Starlink partnership continues to be focused on putting an end to dead zones.
He mentioned Starlink’s appearance at Mobile World Congress this week, where SpaceX President and COO Gwen Shotwell and Starlink SVP Mike Nichols told the attendees that its direct-to-cell (D2C) constellation will be called “Starlink Mobile,” and its goal is to connect to regular, unmodified cell phones everywhere in the world.
Gopalan said Starlink shares the view that D2D “is far more complementary than it is substitutional, just because of the physics and the economics of it.”
He reiterated what everyone in the telecom industry is saying: that satellite constellations don’t have the capacity to cover dense urban areas or indoor environments.
Asked if T-Mobile customers like the emergency satellite texting feature so far, Gopalan said many people like it “as insurance” for safety reasons. “So, usage isn't necessarily the best indicator of value they get,” he said.
Starlink moves fast
“These people do not waste time," Wolfe Research analyst Peter Supino wrote in a note today about Starlink Mobile.
It’s only been six months since Starlink agreed to pay EchoStar approximately $17 billion for its 50 MHz portfolio of AWS-4 and H-block spectrum licenses, and Starlink is already using that spectrum to augment its D2C satellite network, he said. “Today, Starlink partner T-Mobile's cell phone customers in locations that terrestrial networks don't reach can use applications as bandwidth-intensive as a video call,” wrote Supino.
The biggest winner is the mobile customer who lives in a rural area, drives long distances, or enjoys activities in remote areas, he said. They’ll now get a 4G-like experience in the parts of the U.S. not covered by terrestrial mobile networks.
Tower operators may suffer as rural tower leases expire, and customers could be served by LEO constellations, he said.
In terms of any wireless operator creating an MVNO with Starlink, Supino wrote, “We believe that the U.S.' Big 3 mobile operators will not offer such an MVNO to Starlink for obvious strategic reasons. If one does, we'd be scared for telecom multiples!”