• SpaceX raises initial $75bn in huge IPO that could make Elon Musk a trillionaire
• Public offering is underpinned by plans for a Starlink communications platform
• Is the satellite provider a friend or foe for the telecom market?

Elon Musk is on track to become the world’s first trillionaire, with the SpaceX initial public offering (IPO) raising $75bn before trading in the shares even began on the Nasdaq exchange, driven by investor enthusiasm around space-powered mobile networks and orbital datacentres.

Musk is already the world’s richest man, but after he announced plans to list SpaceX, the company raised an initial $75bn by pricing 555.55 million shares at $135 each, and the IPO is set to make SpaceX the seventh most valuable company in the US.

You can check here to see if the SpaceX share price took off (as expected) following its debut.

A key component behind SpaceX’s growth has been its satellite telecommunications division, Starlink, alongside its AI business xAI, which Musk merged with SpaceX last year. The deal made SpaceX one of the first major AI infrastructure companies to go public, with OpenAI also expected to pursue an IPO later this year.

For the telecom industry, however, SpaceX’s communications division, Starlink, is increasingly the bigger story. And it has featured heavily in SpaceX’s pitch to investors, with the company suggesting the value of its addressable market for Starlink is worth $1.6tn – greater than the current value of the global communications sector. 

Starlink currently offers broadband services in 164 countries through its network of low-earth orbit (LEO) satellites. The company operates around 9,600 satellites and continues to expand the constellation rapidly – one of the advantages of being vertically integrated with reusable rocket launches.

What began as a rural broadband provider has steadily evolved into a broader telecom infrastructure business: Starlink also provides backhaul connectivity services for operators including BT, Deutsche Telekom, Vodacom and BICS. 

And now, of course, Starlink, with its specialised fleet of more than 650 direct-to-device LEO satellites that carry cellular technology payloads, offers direct-to-device (D2D) services that enable some LTE smartphones to connect directly to satellites rather than to terrestrial cell towers. 

That proposition has proven popular with mobile operators that want to expand their services beyond the reach of their own infrastructure: A growing number of mobile operators, including T-Mobile US, Rogers Communications in Canada, KDDI in Japan and Virgin Media O2 in the UK, have teamed up with Starlink to offer D2D connectivity. Earlier this year, VMO2 became the first UK operator to launch a commercial D2D service, while T-Mobile launched its T-Satellite service in the US last year.

Through partnerships with around 30 mobile network operators across six continents, SpaceX has positioned Starlink Mobile as a complement to terrestrial cellular infrastructure rather than a standalone satellite service.

But despite partnering with many of the industry’s largest players, Starlink is also increasingly viewed as a long-term competitive threat.

While its current D2D services remain relatively limited, Musk has made little secret of his wider ambitions.

Last month, Musk claimed Starlink could eventually carry most of the world’s internet traffic, potentially bypassing parts of today’s terrestrial and subsea cable infrastructure.

Responding to a post on X citing a SpaceX filing that details a major capacity increase for future V3 Starlink satellites, Musk highlighted plans to increase per-satellite downlink capacity from 96Gbit/s on upcoming V2 satellites to more than 1Tbit/s on V3 platforms.

“There will also ultimately be more than 100,000 V3/V4/V5 satellites for Starlink broadband and direct to cellphone connectivity,” Musk wrote on X, the social media platform he also owns. “If growth continues, Starlink will one day carry the majority of internet traffic. At that point, it is the internet and everything else just connects to Starlink.”

SpaceX has told investors it expects to begin launching V3 satellites in the second half of 2026. Musk’s comments also follow a recent filing with the Federal Communications Commission (FCC), in which the company argued that satellite broadband is increasingly capable of closing rural connectivity gaps without traditional subsidy models.

SpaceX is also targeting the internet of things (IoT) market. Starlink says its direct-to-cell platform will support standard LTE IoT modules without requiring specialist hardware. That could place the company in direct competition with terrestrial low-power wide area network (LPWAN) and cellular IoT providers in sectors including logistics, agriculture, energy and transport.

In its IPO filing, SpaceX revealed that its connectivity business generated $11.4bn in revenue last year – almost triple the $4.1bn generated by its launch operations. The company attributed the growth to subscriber gains, expanding enterprise adoption and continued improvements in network efficiency.

However, despite Musk’s claims about Starlink eventually carrying much of the world’s internet traffic, the company would still face significant technical and commercial challenges if it attempted to compete directly with major mobile operators at scale.

Research by Morningstar found that Starlink’s strongest value proposition remains in markets with limited high-speed broadband competition. The firm argued that the $1.6tn total addressable market outlined by SpaceX is likely to be closer to $129bn in realistic terms, largely because satellite networks struggle to compete efficiently in dense urban environments where capacity constraints and line-of-sight limitations become more problematic.

The wider telecom industry has already begun responding. AT&T, Verizon and T-Mobile US are collaborating on enabling the best D2D coverage, even though they don’t all work with the same satellite partners, while companies such as AST SpaceMobile and Amazon Leo are positioning themselves as alternatives to Starlink in particular services and striking their own partnerships   with telecom operators.

For telecom operators, the challenge is increasingly clear: Starlink may currently look like a partner for extending coverage but, over time, it could evolve into a global communications platform operating above traditional terrestrial networks.

- James Pearce, Editor, TelecomTV