Starlink is preparing to go after the customers of Telstra and Optus, the two Australian carriers currently partnering with the satellite operator, after SpaceX President Gwynne Shotwell revealed the company intends to compete head-on with land-based telcos rather than simply patch their coverage gaps.

Speaking on SpaceX’s first earnings call since its June sharemarket float, Shotwell said the company anticipates winning “quite a few” customers from US giants AT&T, Verizon and T-Mobile, claiming Starlink’s service “will be better” and will “eliminate dead zones” by leveraging its satellites in orbit.

The strategy is set to kick off in the USA before being rolled out globally, including Australia, in what analysts describe as a distinctly “less friendly” approach than Starlink’s current relationship with local carriers.

Shares in all three US carriers fell on the comments, and the implications for Telstra, Optus parent Singtel and TPG are now being weighed by markets, as ChannelNews has been tipping for months.

Subscriber Base Doubles To 12 Million

Josh Gilbert, lead analyst at eToro, told The Australian that “Australia is one of Starlink’s most natural markets”, given telcos only cover about one-third of the country’s landmass.

“A subscriber base that has doubled to 12 million in a year will have local telcos on edge. So far, they’ve worked with Starlink rather than against it, with Telstra and Optus both signing deals to use its satellites to patch their own coverage gaps,” Mr Gilbert said.

“But that relationship could be changing. Shotwell said that the company intends to go after AT&T, Verizon and T-Mobile customers directly, and shares in all three fell more than 4% on the comments.

“What that means for Telstra, TPG and Optus’s parent Singtel is that the partnership with Starlink just got a little less friendly, and while head-on competition may still be a while away, markets tend to price the threat long before the service arrives.”

Regulator Circles After Telstra Outage

The move comes as the Australian Competition and Consumer Commission piles further pressure on the big carriers in the wake of Telstra’s recent nationwide network outage.

The competition watchdog revealed this week it is considering whether consumers’ phones should be allowed to automatically switch to a rival telco when their own network fails, a measure aimed at delivering more reliable coverage.

The ACCC is also examining whether to force carriers to share infrastructure, including towers and domestic roaming, to open up regional Australia to broader competition.

ACCC Commissioner Anna Brakey said: “This inquiry will allow us to examine current market conditions and new technologies through a public, evidence-based and consultative process before deciding whether regulation is needed.”

A TPG spokesman welcomed the inquiry, saying its $1.6bn deal to share towers with Optus had delivered more competition. TPG initially sought the same arrangement with Telstra, but the ACCC vetoed it.