Benzinga - by Chris Katje, Benzinga Staff Writer.
Elon Musk-led companies have been at the forefront of the space and electric vehicle sectors for many years. Now, Musk's SpaceX appears to be gearing up for a potential foray into the telecommunications and cell phone service market.
What Happened: SpaceX recently launched its first set of direct-to-cell Starlink satellites, which could push the company deeper into the consumer communications sector, potentially upending mobile phones as an industry.
SpaceX recently launched 21 Starlink satellites, including six with direct-to-cell capabilities, which could help eliminate dead zones often experienced by cell phone use.
The direct-to-cell technology provides a link from mobile phones directly to Starlink's satellites, instead of the traditional method of mobile networks relying on cell phone towers.
Musk is hoping that the new technology can "allow for mobile phone connectivity anywhere on Earth." The billionaire cautioned that the new technology could be great for areas with limited connectivity, but likely won't be competitive "with existing terrestrial cellular networks."
SpaceX partnered with T-Mobile US (NASDAQ:TMUS) on the new phone connectivity capabilities and received approval from the Federal Communications Commission (FCC) to test direct-to-cell capabilities. SpaceX also has partnerships with other telecom companies in other countries.
SpaceX believes text messaging using the technology could be available later this year, with voice and data capabilities coming in 2025, according to a TechCrunch report. SpaceX will need to get additional approvals from the FCC before launching commercial services.
Related link: SpaceX Worth $180 Billion Now: Musk-Owned Company’s Value Tops Boeing, Lockheed Martin, Disney, Verizon, IBM, Pfizer, UPS
Why It's Important: Starlink currently offers internet service across 70 countries and has over two million customers. The new direct-to-cell feature could serve as an add-on offering or an additional plan that could increase the company's customer base.
While no details are available on if Starlink would offer its own phones someday, the company's technology works with existing cell phones to increase connectivity and could provide a boost for consumers who live in rural areas or often experience dead zones with their existing cell phone plans.
The growing relevance of satellite connectivity for smartphones has garnered attention, particularly due to companies like Apple Inc (NASDAQ:AAPL) utilizing the technology for its emergency SOS services and other offerings on the new iPhone 15.
Plans from SpaceX to use satellites and space to improve cell phone service could see the company competing with others trying to do the same.
Project Kuiper from Amazon.com Inc (NASDAQ:AMZN) has a partnership with Verizon Communications (NYSE:VZ) and is hoping to use satellites to boost cell phone coverage.
AST SpaceMobile (NASDAQ:ASTS) is building a satellite constellation to provide space-based cellular capabilities. The company has partnered with AT&T Inc (NYSE:T) and Vodafone Group (NASDAQ:VOD). The company successfully demonstrated 5G connection for voice and data from a smartphone to a satellite in space in a September test.
Musk-led Tesla Inc (NASDAQ:TSLA) has boosted its home offerings to include solar power, energy storage and in some locations Tesla Electric offerings that allow customers to buy and sell energy directly from Tesla.
Musk once said that Tesla's Powerwall could help a person live off the grid. With energy solutions, internet offerings and potentially cell phone service plans in the future, Musk could have consumers in remote and underserved areas less dependent on obsolete technology, enhancing their quality of life in rural and previously isolated regions.
Read Next: Tesla, Twitter, SpaceX Or Dogecoin: Which Musk-Associated Asset Saw Highest Value Growth In 2023?
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