AT&T and SpaceX were both spectral beneficiaries of EchoStar’s recent exit from the commercial cellular space, but the CEO of the former remains non-plussed by the ability of latter to become a significant telecommunications rival.

AT&T CEO John Stankey explained to attendees at this week’s UBS Global Media & Communications Conference that while he continues to think there is a place for a space-based communication service, physics will prevent such a venture from being able to support a direct competitor.

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.”

Stankey built on that spectrum notion by stating AT&T and its direct rivals T-Mobile US and Verizon each have access to approximately 300MHz 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 80MHz 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 80MHz 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.

That sentiment comes as SpaceX recently submitted a trademark filing for the “Starlink Mobile” name, hinting at potential commercial service aspirations for the satellite-based fixed-broadband provider. SpaceX CEO Elon Musk recently said “that would be one of the options,” during an interview with the “All-in-Podcast.”

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 Mbps 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.

AT&T is not currently one of Starlink’s customers and has instead partnered with AST SpaceMobile on its satellite communication path.

Satellite to power IoT

Despite the doubts over a satellite-based direct rival, Stankey did note such an offering could be a boon for IoT.

“There are some places where, if I was in the IoT space, that satellite might do a better job of picking up certain types of traffic at certain times than a terrestrial network will over time,” Stankey said. “And so I think in the IoT space, it's going to open up, probably growth and opportunity for perpetual connection in some places where maybe it does a better job. And the global nature of satellite, when you have assets that move all over the globe, like container ships and things like that, it might be a better way for certain things to get done.”

That aligned with an ABI Research report that predicted the direct-to-cellular market will generate $11.6 billion in revenues by 2030, with the IoT space itself generating $4 billion in revenues. More broadly, the analyst firm sees nearly $125 billion in revenue opportunities for the space by 2030, citing market opportunities like IoT, backhaul, commercial broadband, and mobile satellite services.

“We are seeing that the market is evolving quickly, and many services are finding enhanced deployment through strategic alliances and from increased bandwidth supply in LEO,” Jake Saunders, VP of Asia Pacific at ABI Research, wrote. “With satellites becoming smaller, more affordable, and reaching closer orbits, the barriers to entry have been lowered, fostering innovation and expanding the scope of satellite-based services and applications. The market is revealing new development paths that will influence the terrestrial and non-terrestrial connectivity markets and shape enterprise opportunities throughout the telecommunications value chain.”