Are European carriers challenging SpaceX's Starlink? Four major carriers plan to join forces to enter the satellite-to-mobile phone market.

Europe's top mobile operators are joining forces to enter the satellite-connected mobile phone market, directly challenging Elon Musk's Starlink's dominant position in Europe.

According to Bloomberg, citing sources familiar with the matter, Deutsche Telekom, Orange, Vodafone, and Telefónica are in preliminary talks to form an alliance to jointly bid for satellite spectrum resources that the European Union intends to reserve for local operators.

This move comes against the backdrop of the EU's active efforts to enhance Europe's independent satellite capabilities and to restrict spectrum access for international companies in the upcoming 2 GHz band auction.

Once formed, this alliance will directly compete with SpaceX's Starlink business. Starlink currently dominates the satellite-to-phone connectivity market, providing SMS, data, and voice services from orbit to ground terminals. SpaceX, lacking EU spectrum authorization, is currently unable to independently offer such services within the EU.

U.S. stock markets were closed on Monday for Labor Day. SpaceX shares rose 4.56% last week, reaching a near two-month high.

One-third of the frequency bands are only open to bidding by European companies.

The European Union is developing new rules for satellite access in the 2 GHz band, planning to reserve one-third of the band for bidding by local companies, with existing spectrum licenses expiring in 2027. According to the EU proposal, any satellite operator wishing to acquire this band must have a majority stake held by a European company.

This move aims to promote Europe's independent satellite service capabilities. Although most densely populated areas in Europe already have well-developed terrestrial wireless infrastructure coverage, the EU is still seeking to build a usable domestic satellite service system in the context of SpaceX's continued expansion of its direct-to-consumer business.

SpaceX has explicitly opposed the EU's proposal to restrict spectrum access for international companies. Currently, SpaceX provides Starlink satellite broadband service in most parts of Europe and has direct equipment service agreements with several European partners, including Deutsche Telekom.

It is worth noting that British operator Vodafone and US satellite company AST SpaceMobile have formed a 50/50 joint venture, with the latter also providing satellite direct-connect mobile phone services.

If the proposal currently being discussed by the EU is ultimately adopted, Vodafone will need to adjust the equity structure of the joint venture to meet the requirement that European companies must hold a majority stake in order to participate in the bidding for the relevant frequency bands.

Of the remaining two-thirds of the frequency band, half is reserved for IRIS², and the other half is open to international companies for bidding.

The EU plans to reserve another third of the spectrum for autonomous communication services provided by IRIS².

IRIS² is a satellite constellation built by a consortium led by SES SA, Eutelsat Communications SACA, and Hispasat, with Hispasat providing limited satellite direct-connection mobile phone functionality.

The constellation will not be operational until 2029, and initially, it will focus on providing broadband services.

As for the final third of the spectrum, international companies will be eligible to participate in the bidding.

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