SpaceX has chosen Qualcomm, the US chipmaker, to supply the core equipment for a planned nationwide 5G mobile network run by Starlink Mobile.
Qualcomm described the multi-year agreement as its largest 5G deal to date.
Work is due to start in 2027 across tens of thousands of mobile phone masts in the US.
The move puts SpaceX on a collision course with AT&T, Verizon and T-Mobile, which between them make hundreds of billions of dollars a year from mobile services.
What Qualcomm will supply
Qualcomm will provide the radios and the processing units that sit at the base of each mast, along with the basic software that controls how signals are sent and received.
The radios use a technology called Massive MIMO, which relies on large numbers of antennas to send and receive many signals at once, improving coverage and capacity.
SpaceX is expected to build the rest of the software needed to run the network itself.
Satellites and masts
The ground-based network is designed to work alongside Starlink's satellite service, which beams signals directly to phones in areas with no coverage.
Gwynne Shotwell, SpaceX's president, has described a system in which satellites fill gaps in the countryside while masts handle demand in busy towns and cities.
SpaceX has bought the airwaves it needs in two deals.
It acquired about 65 MHz of mid-band spectrum from EchoStar, which adds capacity, and up to 14 MHz of low-band spectrum from Grain Management.
Low-band airwaves travel further and are better at reaching inside buildings.
Starlink already generates a large share of SpaceX's revenue and profit, following the company's stock market listing earlier this year.
The deal marks a shift from buying airwaves to building a network, although the cost of the masts, the amount of spectrum and regulatory approval all remain open questions.
