Sometime in 2026, Elon Musk will hold an initial public offering (IPO) for SpaceX.
We don’t know exactly when the IPO will happen. But it’s becoming increasingly clear that when SpaceX does IPO, it will be bad news for everyone SpaceX competes with.
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Who will become Elon Musk’s next victims? Rival rocket companies United Launch Alliance (ULA) and The rocket lab in the US and Arianespace in Europe are all obvious targets. Already the biggest name in space launch, SpaceX will become even more formidable once it has a $1.5 trillion IPO valuation to work with. Just the $50 billion in new cash that SpaceX is rumored to be raising would be 30% more than Rocket Lab’s entire market cap — and 4 times all of the revenue that co-owns ULA. Lockheed Martin generates from its space business in a year.
So you can see why other space companies might be a little nervous.
Less obvious, however, is the threat Musk poses to the telecom industry — to the rising star AST SpaceMobile(NASDAQ: ASTS)and for two of AST’s biggest business partners, AT&T(NYSE: T) and Verizon Communications(NYSE: VZ).
Image source: Getty Images.
Last month, SpaceX released its latest Starlink Progress Report, detailing the growing size and influence of its satellite internet business, Starlink.
Among other revelations in this report — such as the fact that SpaceX now has more than 9,000 Starlink satellites in orbit, 9.2 million paying customers here on Earth, and more than $10 billion in annual revenue from Starlink alone — SpaceX also provided important insight into Starlink’s newest project: direct-to-cell (DTC) telephony.
After just two years in the DTC field, SpaceX has now put 650 Starlink DTC satellites into orbit – about 7% of the total. Already, Starlink DTC covers 22 countries on six continents, making Starlink “the largest 4G coverage provider on planet Earth, connecting over 12 million users and counting.”
By the way, the number of Starlink DTC satellites almost doubled in 2025, so it’s growing fast — not just in terms of subscribers, but also in terms of capacity. Initially good only for sending wireless emergency alerts and short messages, the Starlink DTC can now support emails and even video calls.
Ultimately, SpaceX sees the total addressable market for Starlink DTC at 400 million users — room for at least 33 times growth from where Starlink DTC is today.
In contrast, the AST SpaceMobile has only six BlueBird DTC satellites in orbit. It hasn’t started beta service yet – and you have to imagine that’s frustrating for its biggest US partners, telcos AT&T and Verizon.
Starlink DTC isn’t the only thing AST, AT&T and Verizon have to worry about either. Reading the Starlink Progress Report last month, space analysts at Quilty Space realized a second fact worth mentioning.
Starlink has ‘activated’ a total of 20 ‘community gateways’, 13 of which were online in 2025 alone (so More over 100% growth — this part of Starlink’s business is growing even faster than DTC). And, as Quilty notes, creating gateways to distribute satellite Internet to the ground means that Starlink “in some regions … is no longer just the last-mile ISP, but the backhaul itself, a shift that pushes the system toward an infrastructure-style regulation that SpaceX appears to be normalizing before being challenged.”
(To help you visualize this, the “last mile” of the Internet is how you connect to your ISP via fiber, a cell tower, or a satellite. “Backhaul” still connects your ISP to central data centers and major Internet hubs, and from there to transnational and international Internet backbones. Backhaul also happens to be a big part of AT&T’s business, and Verizon.)
Starlink DTC already pits SpaceX against AT&T and Verizon in wireless — initially only in areas with limited cell phone coverage, but increasingly everywhere. If Starlink also starts an infrastructure-style internet backhaul business, then this is a second area of the telecom business where the companies are competing. And again, currently, Starlink is growing this part of its business faster than it grows its fleet of satellites and even faster than it grows the number of Starlink DTC satellites.
It will be hard to quantify the size of the business or the potential profits SpaceX could earn from it until we see the company’s IPO prospectus. However, when the prospect comes around, be sure to pay attention to this emerging backhaul business.
Because SpaceX already is.
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Rich Smith holds positions in Rocket Lab. The Motley Fool has positions and recommends Rocket Lab. The Motley Fool recommends AST SpaceMobile, Lockheed Martin and Verizon Communications. The Motley Fool has a disclosure policy.
SpaceX IPO Poses Existential Threat to AST SpaceMobile, Verizon and AT&T was originally published by The Motley Fool
