Space race to connect satellites to phones with Apple, SpaceX, AT&T

The race to deliver high-speed internet from satellites is well underway, but another, more ambitious competition to connect directly from space to devices such as smartphones began in earnest earlier this year.

The potential untapped market – which relies on sending text via space, but extends beyond it – prompts the story of two strategies: those who install specialized antennas in telephones, as opposed to those who install high-powered antennas on the satellites themselves. For some companies, that means spending billions on what could end up being a losing streak.

“The satellite industry is really niche and – if they can harness the connection of billions of smartphones – they can start talking about much larger market sizes than they’ve ever been able to address before. Caleb Henry, principal analyst at boutique research firm Quilty Analytics, told CNBC.

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A multitude of projects and partners – from Apple, IridiumSpaceX, T-Mobile and AT&T, among others – have established themselves in 2022, in various stages of development to connect directly to smartphones. It has long been a dream of satellite communications visionaries, but bulky, specialized, and usually expensive satellite phones have failed to catch on with the mainstream.

According to Patricia Cooper, founder of Constellation Advisory and former SpaceX vice president for government satellite affairs, an evolution in technology is reshaping the race for perfect space communications.

“One of the differences [from earlier generations] is the capability of today’s satellites in low Earth orbit, which means they might be able to provide more than just a type of fine text, or almost like a pager service,” Cooper said.

Divergent technology

SpaceX announced a partnership this summer that would allow T-Mobile users to send messages from places inaccessible by terrestrial cell towers, using SpaceX’s second-generation Starlink satellites.

CEO Elon Musk said larger and improved Starlink satellites would feature large antennas that could transmit directly to a mobile device, with T-Mobile eventually hoping to add voice calls through the satellites.

While SpaceX has launched more than 3,000 first-generation satellites so far, adding direct phone service will require thousands more.

The partnership is similar to those concluded by AST SpaceMobile. Last month, the company launched its second test satellite into orbit and struck deals with mobile telecommunications, including AT&T, Vodafone and Rakuten. The satellite company went public via a SPAC last year and has raised nearly $600 million to date.

AST’s network would consist of fewer satellites than the Starlink constellation, but still requires the deployment of nearly 250 satellites for global coverage.

Private company Lynk Global is also aiming to deliver a cell tower in space from satellites, with plans for a constellation of several thousand within a few years. Lynk has raised around $25 million since its inception in 2017. So far, five test satellites have been launched into orbit.

The company said it sent “the world’s first text message from an orbiting satellite to a standard cell phone on the ground” in early 2020.

And while some are building satellite networks, other major players are considering ground-based innovations, with systems dependent on a specialized antenna in phones.

Apple – the leading provider of satellite communications for smartphones so far, albeit in limited capacity at startup – recently announced an emergency feature of iPhone 14 models that takes advantage of the technology. In partnership with Globalstarthe feature allows users to send compressed text messages from iPhone 14 via satellites.

Apple would have to spend more than $400 million to use the majority of Globalstar’s network and add more satellites to it.

Iridium, a longtime provider of satellite communications to specialty phones, has yet to announce a partner for direct-to-smartphone service. But last month, CEO Matt Desch told CNBC at the 2022 World Satellite Business Week conference that his company was “working on this opportunity.”

Iridium expects to finalize a contract with a smartphone partner by the end of 2022, with Desch saying “our service will be global from day one” upon launch.

A way to go

Companies must overcome key technological and regulatory hurdles to bring these long-envisioned networks to market.

“Services so far are all starting with the least intensive service they can provide – and that’s texting,” noted Henry of Quilty Analytics. “The true testimony to the level of service that each of these companies will be able to provide will ultimately depend on how many satellites they are able to launch, how powerful the satellites are and how much spectrum they have. access. “

Both Henry and Cooper said the regulatory unknowns around these types of services will be particularly difficult for enterprise networks. Telecommunications is “a heavily regulated field,” Cooper said, and “there aren’t many scenarios where the rules are first set for a new technological innovation.”

She also pointed out that the true reach of the market, and how lucrative it could be, remains to be seen.

“I don’t think we know how it’s going to be paid for. We don’t know if the market will be determined by how much the cellphone companies will pay the satellite companies to partner up and invest. [in constellation infrastructure]or if it’s going to be paid for by consumers and it’s going to add pennies to your bill and it’s going to trickle down to the satellite companies,” Cooper said.

“Until we know that, we can’t know the scale,” Cooper added.

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