EspaceX announced a deal with a chipmaker Qualcomm to providing key network technology for challenger Elon Musk’s Starlink Mobile service Verizon, AT&T And T-Mobile.
Qualcomm said Wednesday that the ground network it will help SpaceX build “will complement Starlink’s satellite capabilities,” with deployment planned for next year. Financial terms of the multi-year agreement were not disclosed.
“Together with SpaceX, we are building leading cellular infrastructure in the United States, advancing 5G today, with the opportunity to lay the foundation for AI-native 6G in the years to come,” Durga Malladi, Qualcomm executive vice president, said in the release.
Starlink is a critical part of SpaceX’s business, accounting for 36% of the company’s third-quarter revenue and 85% of its operating profit. But so far, the company’s consumer business has been limited when it comes to direct-to-device mobile services because its satellite network can’t provide all the voice, video and data coverage offered by its competitors on popular smartphones.
Now, SpaceX is seizing the spectrum and forming partnerships to take on the major mobile operators. Last month, the company announced an agreement to purchase a national spectrum portfolio in the 800 MHz band. The news shook shares of U.S. carriers. Earlier this week, the Washington Post reported that SpaceX was in talks to acquire Boost Mobile from EchoStar.
SpaceX went public in June in the largest IPO on record and is now valued at nearly $2 trillion.
Along with Qualcomm, SpaceX will use the chipmaker’s Dragonwing cellular infrastructure hardware and software in base stations to enable high-capacity coverage for Starlink Mobile.
Qualcomm has long made chips for cellular networks, but it’s best known for making modems and radios built into devices, not base stations for running a wireless network. The company has targeted carriers and other infrastructure companies since making a larger push into the 5G infrastructure market in 2020.
SpaceX represents one of Qualcomm’s most high-profile customers or partners in 5G infrastructure, following previous deals with Verizon, Dish and Europe’s Vodafone Group.
Although SpaceX plans to use Qualcomm’s technology to establish tens of thousands of new cell sites, it has not announced cell tower company partners or indicated how many new towers might be needed.
Mobile carriers typically rent space from companies such as American tour And Crown Castlewhich typically host multiple operators from a single site.
SpaceX did not respond to CNBC’s request for additional information.
— CNBC’s Kif Leswing contributed reporting.
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