Starlink poses growing threat to UK and EU telecom providers The Times Emma Powell, Media and Telecoms Editor Starlink poses growing threat to UK and EU telecom providers Elon Musk sent one of his clearest signals yet that he is intent on taking the fight to incumbent telecoms operators, acquiring spectrum licences in the US An antenna of the Starlink satellite-based broadband system in Ukraine YASUYOSHI CHIBA/AFP via Getty Images Emma Powell , Media and Telecoms Editor Tuesday October 20 2026, 6.00am BST , The Times Listen 0:00 / · 8:06 min Share Share this article Email Twitter Facebook Link Save When Elon Musk first rolled out Starlink to households in 2020, he insisted that his satellite broadband service was “not some huge threat to the telcos”, framing his offering as a gap-filler that would provide coverage for rural areas where traditional telecommunications infrastructure did not reach. This month the world's richest man sent one of his clearest signals yet that he is intent on taking the fight to incumbent telecoms operators, acquiring spectrum licences that would pave the way for SpaceX, the owner of Starlink, to launch a mobile service directly to consumers across America by the end of next year. SpaceX bought Grain Management's 800 MHz spectrum portfolio for approximately $8 billion in cash and is buying 65 MHz of spectrum from EchoStar for about $19.6 billion, Most commented 1 Russian strikes 'leave half a million Ukrainian homes without power' Russia-Ukraine war 390 comments The purchase will set up Starlink Mobile, which will combine Musk's constellation of more than 10,000 satellites with a terrestrial network, to become “a major mobile carrier in the US”, the company has said. SpaceX founder Elon Musk at a T-Mobile and SpaceX event as the two companies announced plans to work together Michael Gonzalez/Getty Images The move sparked a sell-off in the shares of the three big American mobile operators — T-Mobile, Verizon, and AT&T — that also spread to UK telecommunications companies BT and Vodafone, as wary investors eyed Musk's next step. Top stories 1 Clodagh McKenna: I always get up at 6am on holiday. I love the calm Inspiration 2 16 of the best safaris in Africa Africa While some analysts argue that the threat is exaggerated, others say the longer-term challenge from Musk should not be dismissed. Advertisement Of Starlink's 13 million broadband customers worldwide, only 100,000 are based in the UK, clustered around remote parts of the country, where the return for internet providers has so far not justified the cost of laying cable in the ground. That figure is dwarfed by the more than 8 million served by BT and more than five million by VirginMedia O2, the second largest player. Top stories 1 Prepare now for the inheritance tax mess coming for your pension Tax Capacity remains a big challenge for satellites to overcome in competing head-on with faster full-fibre broadband in more urban areas. Fibre covers roughly 86 per cent of the UK, according to data from Thinkbroadband, the comparison and news site. That compares with a penetration rate of about 60 per cent in the US, figures from America's Fiber Broadband Association suggest. “There's a huge current ceiling on the number of satellites that can be launched at any time, which prevents you from increasing the number of people and speeds that you can achieve,” Matt Howett, founder of Assembly Research, said. At the start of this year Starlink rolled out price cuts, with its high-speed service now costing ￡35 per month, down from its previous entry-level price for households of ￡55. However, that is still at a premium of more than double some of the equivalent packages offered by traditional providers that have proliferated in the highly competitive market in recent years. A homeowner sets up a Starlink satellite internet system. Cate Dingley/Bloomberg via Getty Images “I think they will go for a strategy of optimising their revenue, which is probably to keep premium pricing where they don't have fibre competition, rather than bringing down pricing to maximise the take-up,” Karen Egan, head of telecoms at Enders Analysis said. Advertisement However, others think that Musk's broadband service could become more assertive in its pricing strategy if capacity increases. Starlink is in the process of upgrading its constellation, launching the first 26 of its next-generation V3 satellites last month, which the company has said will allow for increased capacity on the network. Analysts at New Street Research estimate that Starlink will have 600 of the more powerful V3 satellites in orbit by the end of next year and 20,000 by 2035, which would increase the capacity on the network by 20 times. Assuming higher broadband usage, Starlink could therefore increase its customer base by up to ten times — to about 130 million — from current levels, New Street estimates. “My prediction is a year from now, Starlink will then start cutting pricing pretty aggressively … so they're at ￡40 a month at the moment, my prediction is a year from now, that price is either ￡30 or ￡29, and then it suddenly becomes more headline grabbing,” James Ratzer, an analyst at New Street Research, said. SpaceX has also shown that it is willing to absorb billions in losses to gain early scale in nascent markets. “He's disruptive, he's not interested in making money for it. He wants the customers,” Howett said. Advertisement Inroads made by Starlink into the direct-to-device mobile market in the UK have been more muted. Some point towards the much lower population density in the US, which makes the capacity constraints of satellite-enable mobile services less of an issue, compared with the UK. So far, Starlink has partnered with mobile operators to offer its direct to device technology, which beams signals directly from satellites to smartphones in remote areas where it is either too impractical or expensive for traditional masts and fibre to reach. In the UK, Virgin Media O2 became the first operator in the UK to launch satellite-enabled services direct to smartphones by signing a deal with the American company this year, supplementing its terrestrial coverage in remote areas. Securing the licences for mobile spectrum — the radio waves that enable wireless technology — is one hurdle to Musk launching his own network in the UK, analysts say. Advertisement Next year, a strategically valuable slice of Europe's satellite spectrum is set to be reallocated. The 2GHz band is operated by Viasat and Echostar, two American satellite providers, but their EU licences come up for renewal in May. Ofcom is consulting on how the spectrum will be allocated and is expected to report its findings next month. Meanwhile the European Commission has said that two-thirds of the capacity will be allocated to native direct-to-device operators , with the remainder open to non-EU players . The allocation plans have been fiercely criticised by SpaceX, whose Starlink service is expected to be interested in the spectrum. The battle for control of the skies has become a source of rising transatlantic tensions, which could impede Musk's attempts to gain access to valuable spectrum within the UK and the rest of the continent. In Europe, the largest telecoms providers, including Vodafone and Telefonica, are considering forging an alliance to secure the 2GHz frequencies and potentially launch a wholesale satellite-enabled direct to device service, in an effort to fend off Starlink. However, a range of different bands of frequencies would be needed to deploy a mobile network at scale for the mass market, analysts say. Starlink signals can weaken or fail when passing through walls. One option for Starlink to gain a greater foothold in the UK mobile market could be to launch its own “mobile virtual network operator” (MVNO), which piggybacks on the networks of the mobile operators, and use its satellites to enhance coverage, Ratzer said, pointing towards Vodafone Three. Advertisement Under the terms of the merger between the two networks last year, the country's largest operator must offer the same terms to any new MVNO as the existing service providers it supplies, until 2028. Such a move would “have real headline risk to the UK market”, he said. Business Companies & Markets Space Elon Musk BT Group SpaceX Share Share this article Email Twitter Facebook Link Save