> license LTE spectrum in every country

I think this is the biggest reason. All nation's governments will absolutely ensure, overtly or covertly, that their national regulators limit any space-based supra-national system from being able to threaten their national telephony and data carriers. Why? Preventing losing national capabilities, government revenue (taxes, licenses & other domestic carrier fees, lobbying, kickbacks, bribes, etc) and, most importantly, losing the ability to snoop at will on calls and data (at least metadata if not full-take). Even in countries where the major carriers are all based in other nations, existing towers being land-based creates jurisdiction for the government to control and tax.

While many westernized democracies like to proclaim their commitment to freedom, rule of law and individual human rights - in practice there are currently zero governments on earth free enough to not consider loss of that absolute control over citizen's private communication an existential threat. Even in places where existing laws don't currently make it illegal, as soon as technology enables it - it will certainly be made illegal (by any means necessary). I assume SpaceX is smart enough to understand this reality.

> All nation's governments will absolutely ensure, overtly or covertly, that their national regulators limit any space-based supra-national system from being able to threaten their national telephony and data carriers

The ITU is pretty overt about how frequency allocation governance works. Absolutely no one wants a free-for-all frequency regime, for a multitude of reasons - not even SpaceX.

You may recall that Huawei 5G equipment was expunged from domestically-controlled, western infrastructure without having broken any laws, due to fears of future abuse. Your suggestion of a foreign company unilaterally, and illegally[1] imposing it's foreign-controlled, space-based phone network goes much further than whatever fears Washington had over Huawei.

1. Pretty much every country on earth with a government regulates how radio spectrum is licensed for telecommunications, not for the purposes of control as an end, but coordination and preventing interference.

An example is flying over India. Satellite internet service is not permitted. It cuts off the moment your flight crossed land in India and usually re-actives immediately after leaving.