Starlink's mobile ambitions could run into a wall of steel and concrete

An analyst is throwing cold water on Starlink's ambition to become a mainstream mobile carrier.

In a recent earnings call, SpaceX President Gwynne Shotwell said she expected Starlink to provide better service than the Big Three wireless carriers — AT&T, Verizon, T-Mobile — by the end of 2027.

Benedict Evans, a former Andreessen Horowitz partner who spent decades studying mobile technology, however, said complications with providing service in urban areas would likely stymie such a plan.

"The hard part is having coverage in a city with steel and concrete blocking every signal past 50 yards," Evans wrote on Threads on Thursday. "That's the cost."

Starlink Mobile acts mostly as a satellite safety net for phone carriers. The company's satellites operate like cell towers in space, connecting phones when on-the-ground service is unavailable, including in remote areas or emergency situations.

The service has emerged as the most profitable revenue stream for Elon Musk's companies, netting them a cool $1.66 billion in Q2.

To expand Starlink's coverage beyond remote areas, Musk said on the earnings call that he expected Starlink to deploy "a large number of small stations" in lieu of large cellular base stations.

In his Threads post, Evans said the number of small stations Starlink would have to build would likely cut into the service's vital profitability.

"Can you save enough money from using satellite for rural and for backhaul on some (how many?) of your base stations to deliver a meaningful cost advantage," he said. "What's the algebra?"

Evans attached a graph in a separate Threads post on Friday, showing that most monthly internet traffic is generated from users in urban and suburban areas, where Starlink would have to either build new infrastructure or rent from existing companies.

Starlink did not immediately respond to a request for comment.