The EU's plan to reserve one-third of the 2 GHz satellite band for European-majority-owned operators is pushing Deutsche Telekom, Orange, Vodafone and Telefonica into alliance talks that would challenge SpaceX's Starlink, while forcing Vodafone to restructure its AST SpaceMobile venture ahead of the 2027 license expiry.
The European Union's plan to reserve a third of the 2 GHz satellite band for operators with majority European ownership is pulling Deutsche Telekom, Orange, Vodafone and Telefonica into an alliance that would take on SpaceX's Starlink on the continent. The four carriers are in early talks to jointly bid for the airwaves, Bloomberg News reported Monday, citing people familiar with the matter, with no final decision yet made on the consortium or its bid.
The proposal, part of a broader push to build sovereign satellite capability, would require any operator winning the reserved spectrum to be majority-owned by European companies, a condition that would also force Vodafone to restructure its 50/50 joint venture with U.S. satellite firm AST SpaceMobile before it could participate. Existing spectrum licenses in the band expire in 2027, setting the timeline for the auction and any restructuring.
The alliance would create a European counterweight to Starlink, which currently dominates satellite direct-to-cell services by beaming text, data and voice to ground terminals from orbit. SpaceX, which lacks EU spectrum authorization, cannot yet independently offer such services inside the bloc, though it already provides Starlink broadband across most of Europe and holds direct-connect agreements with European partners including Deutsche Telekom. SpaceX has publicly opposed the EU's plan to restrict international access to the band.
Under the EU's draft rules, the remaining two-thirds of the 2 GHz spectrum would be split evenly: one-third reserved for IRIS², the sovereign constellation being built by a consortium led by SES SA, Eutelsat Communications and Hispasat, and the final third open to international bidding. IRIS² is not expected to enter service until 2029 and will initially focus on broadband, with Hispasat providing limited satellite direct-to-cell capability. That timeline leaves a window in which the four carriers' alliance, if formed, could establish an early European foothold in direct-to-cell before the sovereign network matures.
The stakes are structural for the satellite-to-mobile market. Europe's population centers are already densely covered by terrestrial wireless infrastructure, so the value of the reserved spectrum lies less in filling coverage gaps than in securing a strategic position as direct-to-cell traffic grows. For Vodafone, meeting the majority-ownership test would likely mean diluting AST SpaceMobile's stake in their venture or restructuring its equity, a step that could reshape the economics of a partnership built on a 50/50 split. For SpaceX, the carve-out narrows the path to offering direct-to-cell services independently in the EU, forcing it to lean on European partners or wait for the international tranche.
The regulatory direction also carries market implications beyond the carriers themselves. SpaceX shares rose 4.56 percent last week to near two-month highs, though U.S. markets were closed Monday for the Labor Day holiday, leaving the sector's reaction to the alliance talks untested. The outcome of the EU consultation, and whether the four carriers formalize their consortium before the 2027 license expiry, will determine how quickly a European rival to Starlink can take shape and how much of the direct-to-cell market it can capture before IRIS² comes online.
This article is for informational purposes only and does not constitute investment advice.
