Mobile Race to Space Heats Up

The race to be the first mobile carrier to launch satellite-to-cellular connectivity should start to get pretty heated this summer after the news that AT&T signed a commercial deal last week with satellite connectivity partner AST SpaceMobile that runs through 2030.

Impact: The deal is significant, because it means once AST SpaceMobile gets its first five BlueBird low-Earth orbit satellites into orbit sometime this summer, AT&T will be able to offer satellite-to-cellular connectivity to a portion of its mobile subscribers using standard everyday devices. The technology will enable AT&T Mobility customers to access satellite broadband on their phones in remote areas lacking cellular connectivity. But unfortunately for A&T, a report from PCMag indicated the service won’t be fully available throughout the country until AST SpaceMobile gets between 45 and 60 satellites launched — and that could take a while. The company projects it will be able to launch a second batch of larger satellites later this year or in the first quarter of 2025 and expects to launch 72 satellites per year starting next year.

The satellite operator fell behind in its production schedule after supply-chain issues with a vendor necessitated it taking over production of the missing components itself. Now that it has started manufacturing one of the components and has another supplier using IP and design from AST SpaceMobile, things are more or less back on track. AT&T’s press release said it would “continue to work directly with AST SpaceMobile on developing, testing, and troubleshooting this technology” with the goal of coverage across the entire continental U.S. Depending on what AT&T means by continental U.S., that could leave some of the most remote territory in the country located in Alaska uncovered by the technology.

While AT&T has been waiting for AST SpaceMobile to deal with those delays, which saw the initial launch pushed from Q1 to Q2 and now to Q3, and get its first satellites into orbit, T-Mobile and partner SpaceX have been plowing ahead on their own direct-to-cell connectivity strategy. The two have been testing T-Mobile’s spectrum on a constellation of 38 SpaceX Starlink satellites and have hundreds more in the queue, meaning that not only could this pairing end up being first to market, it also could offer much more significant coverage than what AT&T will initially be able to offer. But first to launch may not be the best to launch in this case, as the T-Mobile-SpaceX partnership will only support text service to start before adding voice and data later, likely in 2025.

According to AT&T, its agreement with AST SpaceMobile solidifies a relationship that has been building since 2018 and involves AT&T providing AST SpaceMobile with access to its spectrum. Operating under a non-binding memorandum of understanding, the two have successfully partnered on tests that yielded a number of satellite-to-cellular firsts, including a voice call, a text, and a video call from space, all occurring between standard smartphones. But the new deal makes things all the way official and ties the companies together for at least the remainder of the decade. AT&T also has a stake in the satellite company’s success, joining Google, Vodafone, and others earlier this year to invest $155 million in the company. As a result, AT&T can claim part ownership of the company. The new deal acknowledges that, as AT&T network chief Chris Sambar will take a position the satellite company’s board of directors.

CEO John Stankey spoke to AT&T’s connectivity goals during a recent J.P. Morgan technology conference where he discussed the company’s convergence goals and mentioned the role direct-to-satellite communications will play. Connectivity to Stankey means “providing customers with Internet access no matter where they are,” according to Fierce Network, and he wants to blanket the country with access to connectivity wherever they need it using whichever technology works best in a particular area. He also hinted that convergence will play a key role in getting AT&T to its target penetration rates of 40%-50%, meaning AT&T likely is anxious to get its satellite connectivity up and running so that it can move closer achieving the core connectivity and convergence goals it has set for itself.

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