Qualcomm To Power SpaceX’s Masive 5G Nationwide Network As Musk Takes Aim At Telecom Giants

SpaceX’s bold move to challenge AT&T, Verizon and T-Mobile became even clearer on Wednesday after Elon Musk’s company signed a multi-year hardware and software deal with Qualcomm. The agreement provides critical cell equipment for SpaceX’s terrestrial 5G network spanning thousands of towers, complementing Starlink’s low-Earth-orbit satellite constellation.

Bloomberg reports that the SpaceX-Qualcomm deal covers tens of thousands of cell sites nationwide, using the chip company’s Dragonwing components and network software to support calls and data traffic.

Qualcomm Executive Vice President Durga Malladi said the number of planned towers for the new network will rival the number already in operation by major wireless carriers.

Malladi said, “From our perspective, they are very committed and serious,” referring to SpaceX’s intention to follow through with the buildout. “Our degree of confidence is extremely high.”

Last month, the outlet reported that SpaceX was in talks with several tower companies, including Crown Castle, which, along with American Tower and Vertical Bridge Holdings, is among the largest cell tower owners. The report said SpaceX planned to access a whopping 80,000 cell sites for the new network.

BNP Paribas analyst Sam McHugh commented on last month’s report: 

Would this be good enough to compete in wireless?

The 80,000-tower figure is at the upper end of the telcos’ tower counts (TMUS has c. 85k, alongside c. 60k small cells). If SpaceX did build out to this many sites, even with the limited spectrum it has today, the service would be somewhat comparable to that of the existing carriers, given that it would start with no customers loading the network. However, it would not be capable of matching the existing carriers when loaded with millions of subscribers. This also somewhat undermines the argument that SpaceX can have a structural cost advantage by using its satellites for coverage or pursuing a more “femto or small cell” strategy, which, in a roundabout way, is one positive to take from these headlines.

Also, let’s not forget that SpaceX acquired low-band spectrum and received Federal Communications Commission approval to launch 15,000 satellites designed to connect directly to smartphones.

“This is the last critical piece of the spectrum puzzle needed for SpaceX to provide complete phone coverage in America,” Musk recently said. 

For Musk, Democratic control of both chambers early next year will most certaintly increase pressure to accelerate SpaceX’s network buildout. Hearings, investigations, and document requests could jeopardize spectrum deals and government relationships, while regulatory disputes and Democratic lawfare will certaintly aim to delay buildout and raise costs.