- AT&T CEO John Stankey said satellite is great for IoT and maritime uses, but it doesn't have the power of regular cellular coverage
- However, in 2026, customers of T-Mobile will experience the benefit of having almost ubiquitous coverage, thanks to satellite service from SpaceX's Starlink
- This could be rather embarrassing for AT&T and Verizon
AT&T’s CEO made some comments at UBS Securities this week, indicating that he’s not too worried about competition from satellite operators, at least not immediately.
T-Mobile is making galactic strides on satellite connectivity, via its partnership with SpaceX. The Seattle-based carrier introduced T-Satellite emergency texting for its mobile customers in July. And it’s working on bigger ambitions for satellite connectivity, including mobile voice and data through its direct-to-cell (D2C) partnership with SpaceX’s Starlink.
But AT&T and Verizon have instead chosen to work with AST SpaceMobile, which doesn’t yet have enough satellites to provide uninterrupted coverage.
Speaking at a UBS Securities conference earlier this week, AT&T CEO John Stankey was questioned about angst in the market, driven by low-Earth orbit (LEO) satellite providers.
Specifically, UBS Securities Analyst John Hodulik asked, “Do you see LEO infrastructure as a complement or a substitute to terrestrial networks? How do you expect the business model of the LEO providers to evolve over time? And is it something that we should worry about as terrestrial mobile investors?”
Stankey said, “I view it as largely a complement in the near to mid term.”
He said satellite might be great, right now, for IoT use cases and for maritime uses. “But in terms of replacing the bulk of what happens on your handset every day, it's a tough putt,” said Stankey.
He then launched into the arguments about physics, which most telecom industry analysts have already laid out. Namely, LEO operators don’t have the spectrum or the capacity to deliver enough throughput to cellular devices for all the things that consumers demand. And satellite doesn’t do a good job of providing coverage inside buildings.
He also said satellite has “a more fragile upstream” link than terrestrial networks because terrestrial can get to fiber faster. And wireless operators also have low-band spectrum, which provides a more robust upstream link. “Satellite doesn't have those things,” said Stankey.
But what’s AT&T’s satellite plan?
While Stankey’s arguments make sense, they don’t really answer the question of how AT&T will compete against T-Mobile, which already provides emergency satellite texting. And T-Mobile may soon be able to provide satellite coverage across the entire U.S., which would be a God-send to many people who suffer from gaps in cellular coverage.
Both AT&T and Verizon are working with AST SpaceMobile as their answer to T-Mobile/Starlink. Verizon is also hedging its bets by using Skylo to provide satellite texting.
But a recent satellite research report from Roger Entner of Recon Analytics was pretty harsh on AST SpaceMobile.
“For years, the investment thesis for AST relied on a single, compelling differentiator: the ability to provide voice and broadband data directly to standard smartphones, while Starlink was relegated to basic text messaging,” wrote Entner. “That thesis is dead. Starlink launching full data, video and voice calling capabilities in 2026 fundamentally resets the competitive landscape. The ‘differentiation’ gap has closed before AST could even open its commercial service windows. With Starlink deploying thousands of D2C-enabled satellites while AST struggles to launch single digits, AST is significantly behind.”
He said in 2026 when Starlink rolls out satellite voice and video for T-Mobile, that’s going to be an immediate deficiency for the customers of AT&T and Verizon.
“The market will see a direct head-to-head comparison between a mesh network of thousands of satellites (Starlink) and a sparse network of dozens (AST),” wrote Entner. “We expect the performance gap to be immediate and potentially embarrassing for the carriers relying on AST.”
Stankey’s final comment about satellite at the UBS conference was interesting. He seemed to suggest that Starlink would be better off building wholesale relationships with a lot of wireless carriers rather than trying to become a wireless carrier, itself.
He said, “If you're building the business model in a constellation, wouldn't the best thing be to attract traffic from everybody out there? And I think a wholesale model for them to be able to resell that capacity into people who have a lot of relationships with customers is probably fundamentally a better business model than going out trying to be a carrier.”
So perhaps AT&T will try to strike its own relationship with SpaceX/Starlink.
Entner’s report noted, “T-Mobile faces a strategic trap. Its exclusivity with SpaceX is temporary, lasting only one year post-commercial launch. Furthermore, T-Satellite is a wholesale arrangement.”