Building Its Own Network Could Cost SpaceX $130 Billion
The idea that Starlink’s constellation lets SpaceX leapfrog Verizon, AT&T and T-Mobile runs into a capital-spending problem. Direct-to-device links from satellite to handset keep improving, but carrying real data traffic in dense areas still takes ground towers and backhaul — and the moment SpaceX builds that itself, the cost lands squarely on the valuation.
The $130 billion bill
Bernstein’s Douglas Harned estimates a standalone SpaceX mobile network would run $50B to $130B. Industry estimates for a greenfield build are all over the map, from $15B to $200B, and no one has published a line-by-line bottom-up plan yet.
The comparison analysts keep returning to is DISH, which spent years trying to become the US’s fourth carrier. From 2020 to 2024, DISH put up roughly 24,000 cell sites and reached 268M people in population coverage on $7.4B of cash capex. That figure excludes the large sums spent on spectrum and the financing interest layered on top.
Going head-to-head with the incumbents would mean putting several times DISH’s outlay into the ground. Even with a technology lead in orbit, clearing the dead zones in city cores and underground spaces means densely planting towers and repeaters on the surface.
Capex already running at $18.4B a quarter
SpaceX’s spending is well ahead of what the market penciled in. Q2 capex was $18.4B — more than triple the roughly $6B Wall Street expected.
It doesn’t look like a one-quarter spike. In a recent note, JPMorgan projected SpaceX will spend more than $200B on capex across 2027 and 2028 combined — on the order of $100B of cash a year once faster launch cadence, next-gen Starlink manufacturing, Starship development and network expansion all stack up.
Capex at that scale changes the yardstick. Instead of the multiple attached to a high-margin software or space-platform company, the discount rate starts to resemble that of a traditional infrastructure business carrying debt and depreciation. At that point return on invested capital, not growth rate, becomes the number investors watch.
The partnership case
There’s a strong counterargument that SpaceX teams up with the carriers rather than absorbing the full cost of a ground network. Harned himself sees a partnership as the most likely end state for the mobile business.
Staying a B2B infrastructure provider — supplying satellite backhaul and remote-area coverage to an operator like T-Mobile — is far cheaper than buying towers and spectrum to become a carrier. SpaceX collects usage fees and avoids hundreds of billions in sunk ground costs; the carrier fills the gaps its own network can’t reach and slows subscriber churn.
Management, though, keeps signaling it hasn’t set the build-it-ourselves option aside. If SpaceX turns from partnership toward its own network, its relationship with the three carriers flips to adversarial overnight, with a spectrum fight and a capex war to follow.
An identity question, resurfacing in a rebound
The stock has steadied after its post-listing lows. It hit an intraday bottom of $104.83 on August 3, then drew buyers and recovered to $142 by August 31.
Whether the bounce holds is another matter while the spending plan for the next several years stays murky. MoffettNathanson’s Julie Zhu noted that SpaceX listed into unrealistic expectations and then corrected sharply, and that the bigger question the market is now wrestling with is what SpaceX actually is. She said she would stay on the sidelines until expectations reset to what the technology can realistically deliver.
Between the face of a dominant launch provider and the face of a capital-hungry challenger in wireless, the market hasn’t settled on a price.
What to check next
The things to watch in next quarter’s filings are the direction of capex and the pace of cash burn. Is the $18B-plus per quarter going into Starlink upgrades, or into ground sites and spectrum?
If core margins don’t climb fast enough to cover the bleed from a ground build, the pressure to raise fresh capital or issue debt grows. Finding where the ambition to unsettle the big three meets the limits of cash flow is the clearest lens on SpaceX right now.
Sources checked
Disclaimer — This article is for general informational purposes only and is not a recommendation to invest in any specific security or product. Investment decisions and their consequences are solely the reader's responsibility.
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