T-Mobile US’ management remains excited about its broadband and AI but joined rivals in tempering expectations for satellite.

The carrier made waves in mid-2022 when it announced a deal with SpaceX’s Starlink to integrate satellite-based connectivity into T-Mobile US devices using some of the carrier’s cellular spectrum. It has since launched its commercial T-Satellite services that include text and basic data services.

However, rumors have been circulating that SpaceX is itself looking to enter the mobile communications space as a potential competitor to traditional cellular operators like T-Mobile US, a notion that T-Mobile US CEO Srini Gopalan recently dismissed.

“T-Satellite, from our perspective, has been a huge success. It was a world first when we worked with Starlink to create a functioning direct to sell service. It's hard to do … actually making a satellite going at high speed, talking to a moving mobile phone, is not easy to do,” Gopalan said during the carrier’s most recent earnings call, before pointedly adding that, “it is fundamentally a complementary product and the physics and the economics of that business will make it stay that way.”

T-Mobile US is leaning into that “complementary” nature to extend coverage into sparsely populated rural areas, but Gopalan highlighted limitations.

“I mean, it's great for the 500,000 square miles of uncovered America to have an alternative, but let's be realistic, Manhattan? I want my wireless network, right? And that's our understanding, and that's, I think, the emerging understanding across the industry, that this is a great complementary service,” Gopalan said. “We love the work we've done. We like our partnership very much with Starlink. So that's kind of where I am on satellite.”

Gopalan is instead continuing to push T-Mobile US' more conventional cellular-based and increasingly fiber-based broadband services.

AT&T also suspect of satellite

Gopalan’s notion echoed that of AT&T CEO John Stankey, who late last year told an investor conference audience that the carrier and its traditional rivals T-Mobile US and Verizon each have access to approximately 300 megahertz of spectrum that can be transmitted from each cell site, which is more than triple the amount of spectrum the newly spectrum filled SpaceX can provide from its satellite constellation.

“If you think about it, you get 80 megahertz you get to put on a spot beam that has a radius that is dramatically larger than a cell site – you know, two-and-a-half miles, two miles for a cell site, you're talking about a spot beam right now that's probably close to 20 miles, and you're taking 80 megahertz and you're putting over that period, you have a weaker uplink. That's a hard putt to be a like-to-like replacement,” Stankey said.

Stankey specifically pointed to limitations with “upstream bandwidth,” which “becomes more important in the AI dynamic.”

“It’s inherently going to be a more fragile upstream uplink than what you're going to get in a terrestrial network that gets on fiber really quickly,” Stankey said of a satellite upstream connection. “The faster you can get something on fiber, the more robust that upstream uplink is going to be, and the more low-band spectrum you have to do that, the more robust that upstream link is going to be. Satellite doesn't have those things.”

SpaceX does have a number of deals through its Starlink subsidiary with telecom operators to provide satellite-based services, though most are limited to basic messaging services. The provider has more than 600 satellites in low-Earth orbit (LEO) to support its direct-to-device (D2D) service and more than 8,000 satellites in orbit for its broadband offering.

A recent Analysys Mason report noted that Starlink’s constellation could provide maximum downlink capacity per beam of 18.3 Mb/s using five megahertz of spectrum “under optimal conditions.”

“This capacity needs to be shared between all the users under the same beam, which typically is fairly geographically spread (~50 km diameter),” the report noted.

Stankey's dismissal of satellite as a direct competitor to traditional telecom operators does not mean AT&T is averse to extending its satellite-based offerings. The carrier earlier this month struck a deal with Amazon to tap into its Leo LEO constellation to provide satellite-based “fixed-broadband” connectivity to business customers “in areas where such services are needed.”

The carrier late last year also touted plans to begin offering a satellite-based broadband service during the first half of this year that would ride on AST SapceMobile’s recent successful launch of its latest BlueBird communications array into low-Earth orbit. That satellite is designed to use traditional cellular spectrum that allows it to support services on already released cellular devices.

AT&T is one of a handful of cellular operators that have struck deals to provide some of their spectrum license assets to AST SpaceMobile and in turn lease capacity from those satellites.