Anton is a dog with a refreshingly uncomplicated attitude towards boundaries. He sees something interesting on the other side and considers how to get there. Nobody has yet persuaded him that crossing a fence requires first acquiring the company that manufactured it.
This is why Anton belongs in an essay about telecommunications. He understands the difference between an obstacle and an argument for staying put. In certain boardrooms, that distinction apparently requires another consulting engagement.
Telekom CEO Tim Höttges put the cost of SpaceX entering mobile communications at roughly €200 billion, adding, “Welcome to the party.” You can almost hear the champagne flute touching the spreadsheet. The invitation carries that corporate warmth reserved for someone whose bankruptcy would make an excellent conference anecdote.
Admittedly, Höttges is more alert than the viral clip suggests. In his fuller remarks, he explicitly recognises the threat and invokes Tesla’s effect on the car industry. He knows the cautionary tale. My concern is that European executives increasingly know these stories the way smokers know the warnings on cigarette packets: thoroughly, accurately and without appreciable disruption to the routine.
Anton, meanwhile, has never submitted a market entry presentation. This may be his competitive advantage.
The incumbent’s favourite calculation asks what it would cost a newcomer to become the incumbent, complete with accumulated infrastructure, organisational habits and ceremonial attachment to the way things have always been done. The answer is invariably enormous. Everyone relaxes. Somewhere, a consultant orders another kitchen.
But Musk does not need to become Telekom before becoming Telekom’s problem. He needs an offer sufficiently attractive to make customers reconsider, investors ask awkward questions and comfortable margins develop a nervous twitch. You can spoil an expensive party without buying the hotel.
This is where someone sensible mentions spectrum. Quite rightly. Frequencies are neither complimentary nor allocated according to follower count. Yet the suggestion that American licences last forever confuses renewable rights with divine inheritance. They have terms. They can also be acquired or leased under regulatory rules. SpaceX’s EchoStar transaction is progressing through that machinery. The moat has a sales department.
Naturally, billions remain billions. Musk will need money, permissions, equipment and patience, that last item being less reliably available than launch capacity. None of this makes the undertaking trivial. It does make “he will have to buy things” an underwhelming obituary for a company already arranging the purchases.
Anton also requires infrastructure. Four legs, principally. The existence of these requirements has never convinced him to abandon an interesting destination.
Then comes physics, summoned with the solemn satisfaction of a barrister producing a signed confession. Satellites cannot give every smartphone in a crowded city unlimited capacity. Walls remain walls. Tiny indoor cells still need connections to the wider network, and interference does not disappear because the founder owns a rocket company. These are serious constraints. They deserve engineers, not incense.
Fortunately, the actual plan includes the ground. Qualcomm has announced equipment for a terrestrial Starlink Mobile network, with deployment intended from 2027 and tens of thousands of sites envisaged over several years. This is a substantial construction programme, with ample opportunities for delay and disappointment. It also makes arguing exclusively against satellites rather like explaining that Anton cannot get there because dogs cannot fly.
He was considering the gate.
The prospect worth worrying about combines orbital reach with terrestrial capacity and a company able to coordinate satellite production and launches. Nobody has demonstrated that the resulting economics will conquer mobile. But an incumbent should probably investigate the combination before issuing an explanation of why each ingredient, served separately, makes an inadequate dinner.
Telekom already understands satellites well enough to announce a European Starlink partnership. Quite sensible. Partners can supply useful capabilities. They can also acquire ambitions. There is something wonderfully optimistic about welcoming a supplier into the customer experience and assuming it will remain content forever with its little badge saying VISITOR.
Ask Anton about the durability of that classification.
The car analogy should sting without becoming mythology. Tesla did not singlehandedly cause every European automotive headache, and Musk’s record provides no warranty against failure. The relevant embarrassment is how easily established competence becomes a licence to patronise the unfamiliar. Some executives appeared to believe that manufacturing millions of yesterday’s excellent product constituted a legally enforceable claim on tomorrow.
Telecoms could discover a similar difficulty. Customers are distressingly indifferent to the historical grandeur of the infrastructure behind their bill. They want the thing to work, preferably without needing a postgraduate qualification to understand the tariff. If someone changes their expectations, explaining how much the old arrangement cost is unlikely to restore their gratitude.
My bet is that Musk will force precisely that discomfort. He need not replace every mast. He need only make the established operators work harder for money they had begun treating as a standing ovation.
There is an entire management philosophy built around mistaking the expense of the fence for proof that nobody will cross it. Anton offers a useful corrective. He has no opinion on the valuation. He is interested in what lies beyond it.
Douglas Adams supplied the appropriate boardroom notice: “DO NOT BE ALARMED.” Then: “BE VERY, VERY FRIGHTENED, ARTHUR DENT.”
I wish Höttges well. I hope his company responds with more imagination than another calculation of the admission fee. The party may continue, but the guests are allowed to leave.
Anton, of course, has already worked that out.
No comments yet