Fresh off its IPO — a company’s first sale of shares to the public — SpaceX’s Starlink is eyeing the biggest bill in your mailbox: the phone bill.
SpaceX president Gwynne Shotwell told investors the company has weighed building a ground network to offer mobile service, layered on top of its satellites.
The Journal reported last week that a prototype handset already exists.
A prototype is not a product. It is, however, a statement of intent.
The ambition has hardware behind it. Starlink runs about 10,000 satellites and serves more than 10 million home-broadband subscribers, plus ships, aircraft and a direct-to-phone deal with T-Mobile.
Starlink is SpaceX’s financial engine. The engine wants a bigger job.
Investors should take the ambition seriously. This is a company that made landing rockets look routine, and it does not enter markets to be polite.
The carriers’ bad year
The context is brutal for the incumbents. Over the past year the S&P 500 is up 19% — while AT&T is down 27%, T-Mobile down 26%, and Verizon down 2%.
Cable companies have already poached 8% of postpaid phone share — postpaid meaning the monthly-bill customers carriers prize most.
Those are not crash numbers. They are erosion numbers — the slow kind that grinds a dividend story down one quarter at a time.
So the fence was already sagging before a rocket company showed up to lean on it.
The moat holds — mostly
Taking on the carriers is genuinely hard. Nationwide spectrum, towers and store networks took decades and hundreds of billions of dollars to build.
Physics still votes for the ground, too. In cities, satellite capacity cannot match ground networks.
Starlink’s real near-term play is the edges — rural coverage, dead zones, direct-to-device. That erodes the incumbents’ pricing power at the margin rather than replacing them.
But ‘erodes pricing power at the margin’ matters enormously if you own these stocks for income. Telecom stocks are held for fat yields on the assumption of stable, oligopoly cash flow.
A funded disruptor probing the fence — right after cable broke in — means those yields deserve a bigger margin of safety than they used to.
Put simply: a fat yield on a shrinking moat — the built-in advantage that keeps competitors out — is not income. It is a countdown.
So no, your phone bill is not moving to orbit next month. The sweat is real; the timeline is slow.
Own the layer
This is why legacy carrier stocks stay light in the Capital Wealth Growth Portfolio: high yield, shrinking moat.
The disruption-proof way to own connectivity is the infrastructure layer — the towers, the fiber, and the silicon that ends up in every handset, including whatever Starlink ships.
Towers collect rent from every carrier. Fiber hauls everyone’s traffic. The silicon goes into every handset, whoever sells it.
That is the quiet difference between owning a brand and owning a toll booth. We prefer the toll booth.
When two capital-rich industries fight over the same customer, do not pick the winner. Own the layer they both have to pay.