Starlink threatens big 3 carriers as at&t doubles down on satellite strategy

The escalating competition in the U.S. wireless market has reached a critical juncture, with satellite technology – spearheaded by Starlink – posing a significant challenge to the established dominance of at&t, T-Mobile, and Verizon.

Satellite’s unexpected ascent

During a recent discussion at the Mizuho Technology Conference, at&t CFO Pascal Desroches acknowledged satellite’s potential, albeit limited to just 1% of the population. He doubled down on the existing infrastructure – fiber, cable, and fixed wireless – which he claims will cover a remarkable 99% of the country. Desroches framed satellite as a vital solution for rural communities, a segment currently underserved by traditional networks.

A joint venture for coverage

However, the reality is far more complex. Driven by concerns over Starlink’s disruptive capabilities, the ‘Big 3’ carriers are forging strategic alliances with satellite firms. at&t is partnering with AST SpaceMobile, leveraging a 2030 agreement to deliver space-based cellular broadband to smartphones, effectively tackling dead zones – a critical requirement for the FirstNet public safety network. This isn’t merely a supplementary strategy; it’s a calculated maneuver to contend with a rapidly evolving landscape.

Spectrum pooling and strategic partnerships

Beyond individual deals, a joint venture is emerging, aiming to pool spectrum resources and share the substantial costs associated with deploying direct-to-device (D2D) service. AT&T’s Desroches emphasized the company’s position as the frontrunner among the Big 3 in achieving convergence – the ability to bundle mobile cellular service with home broadband – citing the acquisition of 30MHz of mid-band spectrum and 20MHz of low-band airwaves. By 2030, AT&T projects an expansion of its passings to 60 million, driven by a focus on urban and suburban areas offering competitive pricing.

The bottom line: a shifting power dynamic

AT&T CEO John Stankey has explicitly stated the carrier's intent to collaborate with multiple satellite companies to bridge coverage gaps, ensuring seamless service even in rural areas. While Starlink continues to aggressively expand its network, the combined resources of AT&T, T-Mobile, and Verizon – through strategic partnerships and spectrum sharing – represent a formidable counterweight. The current stock price for AT&T sits at $23.21, a decline of 5.5% year-to-date, reflecting investor sentiment surrounding this transformative shift. Looking ahead, analysts anticipate 250,000 to 300,000 new postpaid phone subscribers for AT&T in the second quarter, a figure that will undoubtedly be scrutinized against the backdrop of this rapidly changing market.