AST SpaceMobile announces satellite-direct-to-phone partnership with Verizon

Satellite-direct-to-phone operator AST SpaceMobile last week announced a strategic partnership with U.S. nationwide wireless carrier Verizon, which committed $55 million to the Texas-based satellite company and another $45 million, if certain conditions are met.

AST SpaceMobile’s deal with Verizon was announced just two weeks after AST SpaceMobile announced a commercial deal with AT&T—Verizon’s chief rival in the U.S. cellular market. With the announcement, all three U.S. nationwide carriers have agreements with satellite-direct-to-phone providers, as T-Mobile unveiled its plans with SpaceX almost two years ago.

AST SpaceMobile founder, chairman and CEO Abel Avellan identified the spectrum that will be used and noted the significance of his company’s deals with Verizon and AT&T—for the carriers, the carriers’ customers and for Midland, Texas-based AST SpaceMobile.

“This new partnership with Verizon will enable AST SpaceMobile to target 100% coverage of the continental United States on premium 850 MHz spectrum with two major U.S. mobile operators in the most valuable wireless market in the world, a transformational commercial milestone,” Avellan said in a prepared statement. “This partnership will enhance cellular connectivity in the United States, essentially eliminating dead zones and empowering remote areas of the country with space-based connectivity.”

Srini Kalapala, Verizon’s senior vice president of technology and product development, echoed this sentiment.

“Verizon has always been strategic and efficient with our spectrum strategy,” Kalapala said in a prepared statement. “We use the spectrum entrusted to us to deliver outstanding cellular service for our customers through our terrestrial network.

“By entering into this agreement with AST, we will now be able to use our spectrum in conjunction with AST’s satellite network to provide essential connectivity in remote corners of the U.S., where cellular signals are unreachable through traditional land-based infrastructure.”

Exactly when this vision will become a commercial reality is unclear, but Scott Wisniewski—AST SpaceMobile’s chief strategy officer—responded to an IWCE’s Urgent Communications inquiry about the company’s schedule to get its initial batch of low-Earth-orbit (LEO) satellites into orbit.

“We plan to deliver our first five commercial satellites to the launch pad in July or August of this year,” Wisniewski said in a statement delivered via email. “Go-to-market strategies will vary by operator and geography, with announcements to come over time alongside our network-operator partners.”

AST SpaceMobile technology is based on the deployment of massive LEO satellites—effectively operating as LTE towers in space—that are large enough to support broadband coverage globally with at least 100 satellites in the constellation. By contrast, Lynk and SpaceX—other satellite-direct-to-phone providers—expect to deploy thousands of smaller satellites to realize their global-coverage plans.

Verizon’s financial commitment to AST SpaceMobile in the deal includes $65 million of commercial payments—$45 million of which are subject to certain conditions—and $35 million of convertible notes, according to a press release about the agreement.

With the Verizon announcement, AST SpaceMobile has agreements with more than 45 mobile network operators worldwide that collectively serve more than 2.8 billion subscribers today, according to the press release.

While AST SpaceMobile and SpaceX have announced deals with U.S. carriers, Lynk has not. However, Lynk—which plans to use the sub 1 GHz spectrum of a carrier partner—has announced plans to launch satellite-direct-to-phone services with Canadien carrier Rogers Communications later this year. Lynk’s long-term goal is to support broadband services when its constellation has hundreds of satellites, but its initial offerings are text services that are available sporadically as its LEO satellites begin to be deployed.

In April, Lynk announced a contract with the U.S. government to provide satellite-direct-to-phone to the Department of Defense (DoD), the Department of Homeland Security (DHS) and other government agencies.

By partnering with cellular carriers rather than competing against them, many industry analysts have expressed optimism that the economics of satellite-direct-to-phone providers like AST SpaceMobile can be more consistently profitable than previous direct-access satellite phone offerings. However, none of the U.S. carriers have detailed how its users will be charged to access the LEO satellites or whether satellite-direct-to-phone service will be integrated into certain rate plans.

The promise of ubiquitous outdoor coverage for unmodified cellular devices has made the satellite-direct-to-phone industry arguably the hottest space in the telecom industry. In a world where payphones are almost extinct and landline phones are increasing rare, improving the coverage and resilience of cellular services is extremely valuable to carriers and the users they serve.

For consumers, satellite-direct-to-phone connectivity potentially could result in the elimination of outdoor coverage gaps that are particularly problematic when a user needs help during an emergency. Apple offers a commercialized satellite-direct-to-phone feature on some of its devices—utilizing the Globalstar satellite system operating on 2.4 GHz spectrum—that supports emergency messaging, although it requires users to point the device at a satellite to work.

Meanwhile, many public-safety officials are monitoring developments in the satellite-direct-to-phone arena, because it could address one of first responders’ biggest concerns associated with using broadband technology–that LTE devices virtually are worthless when outside the footprint of terrestrial cellular coverage.

If satellite-direct-to-phone technology is implemented as envisioned by AST SpaceMobile, Lynk and SpaceX, users would transition their communications to LEO satellites in a manner similar to a regional roaming partner. This would fill coverage gaps and provide a level of redundancy and reliability, if a terrestrial cell site becomes unavailable for some reason, according to proponents of the satellite-direct-to-phone technology.