SpaceX has taken the next big step with its Starlink satellite solution, gaining FCC approval to offer the service to vehicles in motion. Cool; high speed satellite data access while I drive. If this were the 2000s, that would be game changing. But with 5G (and 4G) covering much of the U.S., and a smartphone in my pocket, paying for an additional data stream for the car seems rather underwhelming.

Except that this announcement could actually have some significant ramifications for the mobile market over time. And from SpaceX’s perspective, the company needs to expand from its current consumer focus. While the company recently celebrated gaining 400,000 customers worldwide, it will need a whole lot more than that to make a broadband satellite solution profitable.

Let’s start with the RV market, which is the easiest, but probably smallest opportunity. Starlink recently expanded its residential satellite solution to include a premium RV service. The “premium” is charged because you have no fixed abode (emphasis on the “fixed” part of that) where the service is anchored. That may seem like a cheeky little addition for a satellite service, but if the demand is there, so be it. Expanding the RV solution to include on-to-go service could be useful as RV’ers are more likely to step off the beaten – and connected – path. Yes, we said 4/5G covers “much of” the U.S., but once you head into very rural markets, finding a signal can be elusive still.

The commercial airplane, WiFi-in-the-sky market is a stronger opportunity, although one with some major competitors already, and most airlines are probably already in long-term agreements with their current providers. Despite that, Starlink has signed initial deals with Hawaiian Airlines and JSX (private commercial airline) which is a significant first step. Additionally, when other opportunities come up, Starlink is expected to have a strong competitive offer as, with low latency and high bandwidth, the satellite service could significantly improve the in-the-sky experience for airline passengers (even supporting streaming video).

The final opportunity is, we believe, the true motivation behind Starlink’s move (and indeed the core reason for the Starlink service overall). That is, to provide a reliable, low-latency, ubiquitous data for Teslas. This is not necessarily to provide a consumer connection, but rather for car telematics and, specifically, to support the development of Level 5 autonomous driving. That is a big deal and, we believe, the fundamental core motivation behind the Starlink satellite solution.

To be clear, while many Tesla owners believe they have “self-driving” cars today, they are far from the full, hands-off solution that requires no human attention. And for Level 5 to be successful, the car will need as many data inputs as possible. And this is where SpaceX’s strategy becomes more interesting… and a competitive threat to the mobile carriers.

The mobile carriers have worked hard over the last decade to build partnerships with the car manufacturers to provide telematic services and it is a lucrative business. Further, the carriers have often cited the expansion of those relationships – particularly for self-driving vehicles – as a key use case for 5G. But realistically, cellular service of any G does not blanket the entire U.S. reliably, never mind 5G and if self-driving requires a constant connection that is a problem, to understate it.

SpaceX’s solution could give, at the very least, Tesla the data source it needs for self-driving enhancements. That is, for the rest of the market, the best-case scenario. The worst case, of course, is that SpaceX becomes the carrier of choice for all car manufacturers as they all chase the same goal. Oh, and not just cars, of course. The solution would also be ideal for many other autonomous driving solutions, such as farm equipment, self-driving trucks (ahem, Tesla again), drones and many, many more. And that could be a significant blow to the carrier 5G “new applications” focus.