AT&T Boss Stankey Dismisses SpaceX Spectrum Threat, Cites Scale

AT&T CEO John Stankey pushed back hard against SpaceX's direct-to-device ambitions, arguing the satellite operator's newly acquired low-band spectrum holdings are a fraction of what a scaled terrestrial network requires.

Speaking on AT&T's Q3 earnings call on 21 October, Stankey contrasted SpaceX's single low-band carrier with AT&T's six to eight carriers deployed in metro areas. AT&T puts that spectrum not only on macro sites, he said, but across indoor building systems in high-rises, hospitals and stadiums.

"I wouldn't over-rotate on what I would call one carrier of low-band spectrum," Stankey told analysts. "Let's put this in perspective."

The exchange comes a day after SpaceX president Gwynne Shotwell outlined her company's own plans on its 20 October earnings call. The low-band spectrum SpaceX agreed to buy from Grain Management earlier this month can be paired with Wi-Fi for indoor mobile connectivity, she said, along with devices in towers and Starlink installations in businesses and consumers' homes.

Shotwell estimated Wi-Fi already accounts for between 85% and 93% of mobile connectivity, though she did not explain how portals and passwords would be handled. SpaceX has touted the nationwide low-band portfolio as the means to deliver in-building penetration for its D2D service, which Elon Musk said yesterday should generate billions of dollars in yearly revenue.

Why does Stankey think terrestrial wins?

Stankey conceded that offloading traffic to Wi-Fi has limits. "There are significant loads, even with robust Wi-Fi networks, that are out there," he said. In his view, matching the performance customers expect from incumbent networks demands far more than satellites and hotspots.

"I think it takes a lot of years and a huge level of investment to get to the kind of performance levels that customers have become accustomed to in scaled networks that are running on the infrastructure that most of the incumbent providers have today," Stankey said.

The terrain where SpaceX would compete is, by his account, narrow. "98% of the traffic is where we've already built and where we already have capabilities," he said, adding that customers have grown used to a high level of service in those places.

"We've got the scale where the scale matters," Stankey said. "I feel really good about where we're at."

The remarks amount to a commercial judgment, not a technical rebuttal — Stankey offered no engineering analysis of SpaceX's satellite-to-handset link budgets, only an argument about investment timelines and in-building coverage economics.

What did Q3 deliver?

The confidence came alongside AT&T's strongest consolidated service revenue growth in more than four years. Revenue rose 5.3% to $32.3 billion in the quarter ended 30 September, up from $30.7 billion a year earlier.

Total service revenue increased 3.8% to $26.3 billion, with wireless, fibre and the Lumen mass markets fibre business all contributing. Equipment revenue climbed 12.1% year-on-year to $6 billion.

Income from continuing operations fell to $1.3 billion from $9.7 billion a year ago, though the prior-year figure benefited from the DirecTV transaction gain.

On the subscriber side, the picture was mixed but broadly healthy:

• Post-paid phone net adds of 379,000, down 6.4% from 405,000, with churn flat
• Post-paid phone base of 75.283 million, up 2%
• Prepaid phone losses of 21,000 customers
• Consumer and business internet net additions of a record 769,000, up 25.4% from 613,000
• Fibre net adds of 442,000, up from 309,000
• Fixed wireless access additions of 327,000, up from 304,000

Total internet connections rose 29.3% to 16.2 million. Combined with phone additions, that pushed AT&T's Advanced Connectivity net additions above 1 million for the second consecutive quarter. Advanced Connectivity service revenue reached $23.9 billion, up 6.1%.

The convergence story advanced too. AT&T added roughly 350,000 converged customers, and 42.8% of households using its fibre or Internet Air service now also take its mobile offering.

The spectrum standoff is unlikely to settle soon. SpaceX's D2D service targets a launch in early 2028, giving AT&T and its rivals time to deepen in-building deployments before the first real test of whether one satellite carrier can dent a six-carrier terrestrial footprint.