Owning the launch platform could mean that he's able to significantly undercut current players, although funnily enough soon-to-be competitor Iridium recently launched a whole bunch of new satellites using SpaceX. Good position to be in when your competitors are dependent on you!
There are certainly challenges, though. Latency is a huge problem with satellite internet, for obvious reasons. I'm not sure what the intended bandwidth is but satellite will always "feel" slower than mobile data of equivalent speed. The fact that it's a mesh network with who knows how many "hops" presumably makes it even worse. So it won't ever compete with mobile, not even 3G probably.