Billionaire Elon Musk's Starlink satellite business won the first federal license to provide wireless service from space to an American telecommunications company.
The Federal Communications Commission (FCC) said it approved a plan by T-Mobile to use Starlink's satellites to reach remote areas and eliminate so-called dead zones, Reuters reported Tuesday.
The move came after the FCC last month temporarily allowed SpaceX and T-Mobile to provide direct-to-cell coverage in areas of North Carolina devastated by Hurricane Helene.
The companies announced a partnership in 2022 and Musk's SpaceX rocket company launched the first set of satellites for the venture into low-Earth orbit in January.
"The FCC is actively promoting competition in the space economy by supporting more partnerships between terrestrial mobile carriers and satellite operators to deliver on a single network future that will put an end to mobile dead zones," said FCC Chair Jessica Rosenworcel.
Over 500,000 square miles of the U.S. are unreachable by cell towers because of the terrain, land-use restrictions and other factors, according to T-Mobile.
Starlink has launched about 7,000 satellites into orbit since 2018 and controls about two-thirds of those in use, Reuters reported in September.
Last year, the FCC denied it $885.5 million in subsidies to provide rural residents with high-speed broadband internet access, saying it "failed to demonstrate that it could deliver the promised service."
T-Mobile's stock was trading at $246.56 a share late Wednesday afternoon, up more than 1%.
Starlink is a unit of SpaceX, which is in early discussions to sell insider shares that could boost its value to around $255 billion, making it the most valuable private company in the U.S., Bloomberg reported earlier this month.
