Bernstein spoke about SpaceX's ambitions to create an independent mobile network with direct connection of D2D devices, pointing out serious physical limitations that are unlikely to be overcome in the near future. The analysis has clear implications for American telecommunications operators AT&T, Verizon, and T-Mobile, each of which faces the prospect of SpaceX emerging as a mobile competitor and investing tens of billions of dollars annually to maintain national LTE and 5G coverage.
Bernstein analyst Douglas Harned maintains an “Overweight” rating and a target price of $248, linking SpaceX’s broader valuation prospects to the company’s dominance in the space launch sector and the topic of orbital data processing centers based on artificial intelligence. “We see the potential for a multi‑trillion‑dollar valuation of SpaceX primarily in the link between its dominant position in space launches and the capabilities of AI in orbital data centers,” Harned wrote. The D2D mobile communications segment, by contrast, is the area where Bernstein’s optimistic scenario comes with caveats.. On the second‑quarter earnings call, SpaceX confirmed its intention to launch a mobile business by the end of 2017, and the company is already cooperating with mobile network operators in more than 30 countries as part of the D2D service. The upcoming V2 satellite constellation represents a genuine engineering breakthrough: it operates at an altitude of about 350 km, compared to approximately 500 km for current low‑orbit satellites, while the receiver area is quadrupled and the beam density is higher. However, Harned asserts that to overcome the remaining performance gap compared to terrestrial networks, achievements are needed that the industry has not yet achieved.
Harned identifies 3 key technical limitations. 1st – signal loss along the path in open space when transmitting from a device: a satellite at an altitude of 350 km is at an incomparably greater distance from the smartphone than a cellular tower located a few hundred meters away. 2nd – battery consumption: operating a smartphone at higher transmission power accelerates battery discharge to a degree that consumers are not willing to tolerate. 3rd – antenna amplification. On this point, Harned is particularly categorical: “Amplifying a weak signal is like turning up the volume on a conversation that’s barely audible.” “Louder doesn’t mean cleaner.”
Taken together, Bernstein’s assessment is straightforward: all these engineering problems are unlikely to be fully resolved in the near term, and SpaceX will have to continue exploring additional approaches to providing wireless service. The company’s conclusion is that D2D satellite connectivity in its current form can serve as a valuable additional layer of coverage in remote areas, but it does not meet consumers’ expectations of a primary wireless provider.