[IMAGE CREDIT: U.S. Air Force photo by Justin R. Pacheco and Edvin Richardson from Pexels via Canva]
Key Takeaways
- SpaceX’s connectivity business brought in $5.2 billion in the third quarter, up 69% year over year, which works out to about $21 billion a year.
- On SpaceX’s Oct. 20 earnings call, Elon Musk said he sees a clear path to connectivity revenue about ten times that size or more.
- To get there, Starlink Mobile has to become a real U.S. carrier against AT&T, Verizon and T-Mobile, and service on its new spectrum doesn’t start until early 2028.
- Several hundred billion dollars a year is about what AT&T and Verizon took in combined in 2025, and Musk gave no date for reaching it.
SpaceX (SPCX) had a big third quarter for Starlink: connectivity revenue came in at $5.2 billion, up 69% year over year and 22% from the second quarter.
Then Elon Musk raised the bar. On the earnings call, he said:
“I can say we do see a clear path to several hundred billion dollars a year in connectivity revenue.”
That’s a big number. And the path to it runs straight through AT&T (T), Verizon (VZ) and T-Mobile (TMUS).
About ten times today’s business
Start with the math. $5.2 billion a quarter works out to about $21 billion a year. If “several hundred billion” means $200 billion at the low end, Musk is describing a connectivity business roughly ten times its current size. At $300 billion it’s closer to 15x.
Connectivity is growing fast enough that this sounds less wild than it might. Starlink added 1.6 million consumer subscribers in the quarter and reached 13.6 million. Consumer ARPU rose 5% from the second quarter to $69 a month, and enterprise and government revenue grew 91% year over year. Gross margin was 55%, with roughly 3 points of that coming from a one-time benefit.
The Street is already thinking big too. Connectivity’s $21 billion pace is close to half of the $45.9 billion analysts expect all of SpaceX to bring in this year. And consensus has the whole company at $249.4 billion by 2028.
These estimates may not include the call yet. Since Musk didn’t put a date on his number, I wouldn’t expect it to change the next three years of estimates much.
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The road runs through AT&T and Verizon
Plus: the piece that would get Starlink there is mobile.
Starlink Mobile passed 22 million monthly users at the end of the quarter, up 37% from three months earlier. A few weeks ago, SpaceX got FCC approval to launch 15,000 Mobile V2 satellites and agreed to buy a portfolio of low-band spectrum. Gwynne Shotwell, SpaceX’s president and COO, said that spectrum “will pave the way for Starlink Mobile to become a major mobile carrier in the U.S.”
That spectrum deal sent Verizon stock down 10% in a day.
To see how big the prize is, look at AT&T. It brought in $126 billion in 2025, and analysts expect about $135 billion by 2028.
That’s about 2% growth a year. Starlink doesn’t plan to light up its new spectrum until early 2028, so nothing on SpaceX’s call should move AT&T’s near-term numbers much.
Verizon brought in $138.2 billion in 2025, so the two carriers together took in about $264 billion. Put differently, Musk’s number would make Starlink connectivity about the size of AT&T and Verizon combined.
Musk’s figure covers all of connectivity, including enterprise and government, so not every dollar has to come from AT&T, Verizon and T-Mobile customers. But mobile is the piece SpaceX itself singled out, and it’s the one with a plan and a date attached.
Musk hasn’t shown the math yet
Of course, Musk gave no timeline. He said SpaceX “should do a longer presentation on the game plan for Starlink connectivity,” so the full case isn’t public.
The service itself is also a ways off. Shotwell said the near-term priority is flying the Mobile V2 constellation through next year and integrating the spectrum to turn on service in early 2028.
Evercore’s Kutgun Maral asked how that spectrum can compete with U.S. incumbents. Shotwell started her answer with WiFi: “I think it’s something between 85% and 93% is done through WiFi.” She expects the S-band to carry most of Starlink Mobile’s traffic, with the low-band spectrum handling less but providing “a critical piece.” It’s a reasonable argument for why Starlink can get by with less spectrum than the incumbents, but nobody will know if it works until service starts.
A carrier-sized bet
So can a business running at $21 billion a year really reach several hundred billion? Only if Starlink becomes a carrier on the scale of AT&T and Verizon combined, and that work has barely started. Still, the pieces SpaceX has in hand are real: 22 million mobile users, approval for 15,000 satellites, and spectrum of its own.
My take: SpaceX doesn’t need to hit Musk’s number for connectivity to keep driving the stock. A business growing 69% a year with gross margins above 50% has plenty of room to run, even at a fraction of several hundred billion.
The next clue comes on Oct. 21, when AT&T reports its third quarter and gets its first chance to respond. The real test starts when Starlink Mobile turns on service on its new spectrum in early 2028.
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Disclaimer:
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