Bernstein has raised doubts over SpaceX’s ambition to build a standalone direct-to-device (D2D) mobile network, warning that significant technical challenges could prevent the satellite operator from competing directly with established US wireless carriers in the near term.
The investment firm said SpaceX’s proposed mobile service faces persistent engineering constraints involving signal strength, smartphone battery consumption and antenna performance. It believes the company may need to pursue a partnership or mobile virtual network operator (MVNO) model rather than build a nationwide terrestrial network.
Bernstein analyst Douglas Harned, working with the firm’s US Telecom and Communications Infrastructure teams, maintained an Outperform rating and a $248 price target for SpaceX. He said the firm’s longer-term multi-trillion-dollar valuation case for the company is driven mainly by its dominance in space launches and the potential of AI-powered orbital data centres, rather than its mobile ambitions.
SpaceX has said it plans to launch its Mobile business by late 2027 and is already working with mobile network operators in more than 30 countries on D2D connectivity.
The company is developing its next-generation V2 satellite constellation, which is expected to operate at about 350 kilometres above Earth, compared with roughly 500 kilometres for many existing low-Earth orbit satellites. The satellites are also expected to have larger receivers and higher beam density.
However, Harned said the improvements may not be enough to close the performance gap between satellite connectivity and conventional terrestrial mobile networks.
He identified uplink free-space path loss as one of the major obstacles. Smartphones are much farther from satellites than they are from conventional mobile towers, requiring greater transmission power and improvements in both handset and satellite technology.
Battery consumption presents another challenge, as smartphones transmitting at higher power to reach satellites could drain batteries more quickly. Harned also questioned whether current antenna technology can provide sufficient gain to deliver the quality of service consumers expect.
“All these are engineering problems that are unlikely to be fully solved in the near-term,” Harned wrote, adding that SpaceX may need to explore other approaches if it wants to provide a wireless service capable of competing with established operators.
The assessment has implications for AT&T, Verizon and T-Mobile, which collectively invest tens of billions of dollars each year in maintaining and expanding nationwide LTE and 5G networks.
Bernstein said satellite-to-device connectivity could provide valuable coverage in remote and underserved areas, but questioned whether it could replace the primary mobile networks operated by established carriers. Reliable indoor coverage, consistent performance and low latency remain difficult targets for a satellite-only service.
The firm therefore sees a partnership or MVNO arrangement as a more practical route for SpaceX. Under such a model, SpaceX could provide satellite capacity and spectrum while working with existing mobile operators rather than attempting to build a nationwide terrestrial network from scratch.
“Partner” remains Bernstein’s preferred solution, Harned said, while acknowledging that SpaceX continues to publicly consider building its own network.
The commercial case also remains uncertain. Bernstein said a successful SpaceX mobile business would need to offer more than connectivity in areas without conventional coverage, as a dead-zone service alone may not generate sufficient returns to justify the required investment.
With the late-2027 launch target still in place, Bernstein identified the deployment of SpaceX’s V2 constellation and any formal MVNO partnership as key developments to watch.
For now, the firm’s bullish outlook on SpaceX remains centred on its space-launch business and the potential for orbital AI infrastructure, while its ability to become a standalone mobile competitor remains unproven.
