SpaceX’s multiyear agreement with Qualcomm marks a major step toward Starlink Mobile, as SpaceX plans to begin building a U.S. terrestrial 5G network in 2027 alongside its satellite service.

Under the agreement announced November 4, Qualcomm will provide base-station ASICs and foundational software, while SpaceX will lead higher-level software and network design, using leased towers and new radio equipment.

Qualcomm says its planned massive MIMO equipment could support up to 64 transmitters and receivers per radio unit, twice the 32 in typical current products, and be tailored to SpaceX’s 50MHz of 2GHz spectrum.

The companies have not settled who will design and integrate the base-station hardware, although Lee Chanyeong of Eugene Investment & Securities considers in-house development by SpaceX likely, given its approach to Starlink equipment.

SpaceX has not disclosed suppliers for radio units, servers or Layer 2 and Layer 3 software; it could develop software itself and source hardware from third parties, contract manufacturers or other Qualcomm-based radio suppliers.

Starlink already generates significant cash flow for SpaceX through satellite internet and bandwidth sales to cellular carriers serving customers outside their coverage areas.

A combined satellite and terrestrial network could connect more than cellphone users, including autonomous vehicles, delivery drones, robots and other devices.

SpaceX could compete for spectrum expected to be auctioned in 2027, potentially driving up acquisition costs for incumbents; winning customers could also intensify price competition and slow industry revenue growth.

Qualcomm’s custom silicon and Layer 1 software will handle core radio access network processing, including support for massive MIMO antennas designed to improve network performance.

The choice of purpose-built chips contrasts with Nokia’s and Samsung’s growing use of more flexible general-purpose processors; custom chips can deliver stronger performance but cost more to develop and are less adaptable or reusable across markets.

The cost of building a nationwide network remains disputed: Deutsche Telekom CEO Timotheus Höttges said he believes SpaceX would need to spend at least €200 billion ($223 billion) and that he takes the challenge seriously.

If competition pushes U.S. mobile prices and average revenue per user closer to lower European levels, operators could have less to invest in networks, affecting equipment makers including Ericsson, Nokia and Samsung and potentially telecom economics worldwide.