Do Satellite Entrants Revive the Case for Mobile Access Regulation?

In early 2026, the possibility of Starlink entering the U.S. mobile market—whether through MVNO agreements or wholesale partnerships—was still largely a matter of speculation. That is no longer the case. 

Recent developments have transformed the debate. Starlink has moved to secure spectrum assets, including transactions involving EchoStar, while U.S. mobile network operators have responded by coordinating their own satellite strategies. At the same time, more information has emerged about the technical and commercial contours of satellite-based direct-to-device (D2D) connectivity. 

What was once a hypothetical discussion about entry is quickly becoming a question about market structure. 

More specifically, three interrelated questions now arise. 

First, what strategic path will satellite operators—most notably Starlink—pursue? Will they remain wholesale providers of complementary coverage, or seek to move closer to the retail market, potentially relying on terrestrial access (e.g. MVNO-style origination or national roaming) to deliver a full-service offering? 

Second, how should incumbent responses be interpreted? Are emerging forms of coordination among U.S. mobile operators an efficient way to integrate satellite technology—or a form of collective foreclosure aimed at shaping the role of satellite entrants? 

Third, and most importantly for policymakers, do these developments revive the case for targeted regulatory intervention? If access to terrestrial infrastructure is necessary for effective competition, should it be facilitated—and if so, on what terms? Conversely, if satellite operators control unique “towers in the sky”, could obligations arise in the other direction? And in either case, how should access be priced? 

These questions, though new in their technological context, are not unfamiliar in substance. 

A familiar problem, in a different technological setting 

In the early 2000s, European policymakers faced a similar challenge: how to enable entry in mobile markets characterised by high barriers, concentrated incumbents, and heavy investment burdens following the 3G auctions. 

Access to mobile origination was widely understood as a precondition for retail competition. Yet ex ante regulation played only a limited role in practice. Instead, entry was facilitated through a mix of commercial agreements and pragmatic remedies—most notably temporary national roaming, which allowed new 3G entrants to compete nationally while building out their networks. 

The logic was clear. The issue was not the weakness of entrants, but structural asymmetry: new players had spectrum, but not coverage; ambition, but not infrastructure scale. 

Satellite systems: coverage-rich, capacity-constrained 

Satellite entrants today present a different, but related, form of asymmetry. 

Low Earth Orbit constellations offer something unprecedented: near-global outdoor coverage. Yet they do so under a distinct constraint. Unlike terrestrial networks—limited primarily by rollout costs—satellite systems are constrained by how much traffic they can support at any given moment. 

Each satellite effectively serves an area orders of magnitude larger than a terrestrial cell. Extensive geographic reach, but virtually no-indoor coverage and strict limits on simultaneous usage, particularly for voice and data-intensive services. 

Satellite networks are therefore best understood not simply as incomplete, but as capacity-rationed networks. 

This distinction matters. Early 3G entrants were constrained by coverage gaps; satellite entrants are constrained by concurrency and density limitations. The engineering differs—but the competitive implication is similar: neither can yet deliver a fully substitutable retail service without complementarity with existing terrestrial infrastructure. 

Scarcity, investment cycles, and strategic positioning 

This technical reality translates into a different economic logic. 

Because current D2D services are layered onto already-deployed constellations, the incremental cost of carrying limited traffic appears low. But this should not be overstated. The provision of richer services—such as voice and higher-rate data—will likely require next-generation satellite deployments, with different payload capabilities and potentially significant incremental investment. 

At the same time, however, the system remains fundamentally constrained in its ability to handle traffic. 

The result is a system where: 

• marginal costs may remain low relative to terrestrial networks, 

• but capacity remains inherently scarce and unevenly distributed. 

Pricing and strategy are therefore shaped less by cost recovery in the traditional sense, and more by how scarce capacity is allocated across use cases. 

A wholesale-only model—where satellite capacity is supplied to terrestrial operators—ensures utilisation and reduces commercial risk. But it also means relinquishing control over how that capacity is: prioritised (e.g. emergency vs consumer use), packaged (fallback vs primary connectivity), and monetised. 

In contrast, moving closer to the retail interface—whether directly or via hybrid arrangements—allows the satellite operator to internalise the value of scarcity, experiment with service design, and potentially shape user expectations around connectivity. 

In this sense, the question is not simply whether wholesale is viable, but whether it is strategically sufficient. 

Recent developments point in both directions. On the one hand, terrestrial operators are moving toward coordinated satellite strategies. On the other, the acquisition of additional spectrum assets by Starlink strengthens the basis for more autonomous service development. 

The remaining bottleneck: devices, not just spectrum 

Yet the path to a fully independent retail model remains constrained. 

Spectrum acquisition is a necessary condition for scaling D2D services, but it is not sufficient. A critical limitation lies in device compatibility. 

Current implementations rely on specific frequency bands, radio configurations, and favourable link budgets. The extent to which newly acquired spectrum can be effectively used by existing unmodified smartphones, particularly for higher-quality services such as voice, remains uncertain. 

This points to a crucial constraint: even with spectrum, even with satellites, the viability of a retail proposition depends on the evolution of the handset ecosystem and standards. 

In that sense, satellite operators are not just building networks—they are participating in a broader technology transition. 

Competition over availability—and its regulatory implications 

In this context, the competitive dynamic shifts. Terrestrial networks remain essential for indoor coverage, high-capacity usage, and quality of experience. They therefore continue to represent a complementary bottleneck. 

But the potential impact of satellite systems lies elsewhere. Not primarily in undercutting prices, but in reshaping when and where connectivity exists. 

This reframes the competitive question: not simply who offers the lowest price, but who controls the availability of connectivity. 

And once framed in these terms, the regulatory question becomes sharper. 

If hybrid entrants depend on terrestrial access to offer a viable service, does this create a case—analogous to earlier debates on national roaming—for targeted and possibly temporary access obligations? 

Conversely, if satellite operators control unique, capacity-constrained assets that extend coverage beyond terrestrial limits, could there be circumstances in which reciprocal access or interoperability obligations arise? 

In both cases, the question is not only whether access should be provided, but under what conditions and at what price. 

Foreclosure, coordination, or efficient integration? 

Incumbent behaviour must also be reassessed in this light. 

Coordination among operators may reflect efficient standardisation and a desire to accelerate deployment. Equally, it may shape the emerging market structure in a way that limits the scope for independent satellite-led competition. 

The distinction between legitimate commercial strategy and foreclosure is not always clear-cut. It depends, in part, on whether alternative paths to market remain viable—and on how access to critical inputs is governed. 

A case for targeted, time-limited intervention? 

The experience of 3G rollout offers a useful reference point. 

Even well-funded entrants required transitional support where structural asymmetries—especially in coverage and quality of service—would otherwise have prevented effective competition. National roaming functioned as a pragmatic solution, enabling entry without determining long-term market outcomes. 

A similar logic may be relevant here, albeit in a different form. 

If satellite entrants are constrained by capacity, device compatibility, or service continuity, there may be a case for limited, clearly defined access arrangements, potentially: 

• focused on specific use cases (e.g. continuity of service), 

• geographically scoped (e.g. rural or underserved areas), 

• and explicitly time-bound. 

Such measures would not replicate past regulatory models, but adapt their underlying rationale to a new technological environment. 

Crucially, any such discussion increasingly requires a grounded understanding of the cost and capacity characteristics of satellite systems. While these can be analysed with a reasonable degree of precision, they are not yet widely reflected in regulatory frameworks. 

A wholesale-only equilibrium—or something more? 

One possible outcome is a stable equilibrium in which satellite operators remain wholesale providers—an additional layer in the connectivity ecosystem. 

But this outcome is not inevitable. As satellite capabilities evolve, and as operators accumulate spectrum and operational experience, the incentives to move closer to the retail interface are likely to grow. 

Whether regulation will play a role in shaping that evolution—and on what basis—remains an open question. 

Conclusion: an old question returns 

The emergence of satellite-enabled mobile connectivity does not eliminate familiar regulatory questions. It reintroduces them in a different form. 

When a new class of entrant depends on access to complementary infrastructure, should intervention support entry? And if so, how can this be done without undermining investment incentives or distorting competition? 

What is new is the nature of the underlying constraint: not just coverage, but control over the availability of connectivity itself. 

As the boundary between terrestrial and non-terrestrial networks continues to blur, the answer to that question may once again become central to telecom policy. 

A note on analytical approaches 

Addressing these issues requires bridging engineering realities with economic and regulatory analysis. As satellite and terrestrial systems converge, questions of access and pricing increasingly depend on how capacity constraints, cost structures, and usage patterns interact in practice. 

We are seeing growing interest—from both operators and policymakers—in more structured approaches to these questions. Developing robust analytical frameworks that can inform both regulatory decisions and commercial strategies is likely to become an important part of this evolving debate. 

Stefano Nicoletti

Image credits: “Venus and Starlink Satellites” by ikewinski is licensed under CC BY 2.0.