On September 5th a SpaceX Falcon 9 rocket placed its 7,001st Starlink satellite into orbit. That’s good news, and amongst that number there were 13 of its Direct to Cell (D2C) versions capable of communications direct to smartphones. Those D2C satellites now number 181 in orbit.

But a report from Scotiabank itemises the very real challenges ahead for Starlink and its D2C project and suggesting that there are major difficulties ahead for Starlink. The bank also raised its ‘BUY’ advice on AST SpaceMobile and placed a new price target for AST’s shares to $45.90 (from $28).

The bank says that Starlink is facing “staunch opposition from key industry participants” and talks about complaints from AT&T (a partner with rival satellite operator AST) which argues that AT&T’s analysis shows the harm that Starlink could cause from interference and a risk of 18 percent average reduction in network downlink and market deployment. “AT&T agrees with Verizon and EchoStar that SpaceX/Starlink has not met its burden for [a waiver from the FCC].”

Scotiabank adds that if the FCC stays firm on PFD (Power Flux Density) limits then SpaceX “faces in our view tough choices”.

Those choices are:

· Redesign its satellites at the risk of facing patent-enforcement actions from AST
· Wait until 2027 for the World Radiocommunication Conference to possibly change EPFD (Equivalent Power Flux Density) limits
· Find other available frequencies or
· Buy AST SpaceMobile

With AST now having a market capitalisation of more than $10 billion, a purchase by SpaceX could prove very expensive. Indeed, with a September 12th probable launch date of a batch of five AST satellites, the company’s value could rocket even further.

If Starlink is stymied either by being bogged down in arguments with the FCC or delays in finding solutions for its D2C ambitions then in the meantime AST will enjoy a monopoly position. By spring 2025 and when AST will have launched 17 additional satellites (larger and more powerful that the five being launched next week) and AST would have half the constellation needed for near-continuous coverage over the US. AST says it will need 45 satellites in orbit to provide total coverage over the US and other markets.

The bank says that it believes satellite-based cellular connectivity could be “the next mass telecom service in an industry hungry for growth”. The need is great, says the bank given that cellular ownership is near saturation, pay-TV is no longer the sweet spot it once was, and consequently telcos are looking for a new ARPU generator and satellite would fill in the many dark or non-spots and thus eliminating the need to invest millions in building extra cellular towers.

Other posts by Chris Forrester:

1. European telcos unite against Starlink D2C
2. Rivada insists “deadlines will be met”
3. Ergen will gain “greatest opportunity” by losing DISH
4. Rivada’s latest problems could be fatal
5. SES confirms 25c dividend
6. Intelsat gets licence to rescue Galaxy 25
7. Bank downgrades Virgin Galactic
8. EchoStar fails to find extra cash
9. Rivada: More trouble to come?

Categories: Blogs, Broadband, Inside Satellite, Satellite

Tags: bank, spacex, starlink