- There’s been a lot of activity on the satellite-telecom front of late, and we thought it was time for an update
- The most momentous event recently was SpaceX’s announcement that it’s buying EchoStar’s satellite spectrum
- SpaceX's new spectrum could send ripples throughout the telecom universe
Satellite operators have worked with telecom operators for decades in fairly stable arrangements, particularly for wholesale backhaul services and connectivity in very hard-to-reach locations. But lately, there are wrinkles in the matrix as their relationships are changing fast.
Low Earth orbit (LEO) operator SpaceX is competing directly with terrestrial broadband providers via its Starlink service, grabbing market share. This is especially evident in the latest round of the Broadband Equity, Access and Deployment (BEAD) program, where it looks like more than 20% of BEAD awards will go to the satellite operators SpaceX and Amazon Kuiper.
At the same time, satellite operators have been working with mobile operators on a friendly basis to provide direct-to-device cell phone services. SpaceX is working with T-Mobile and Rogers Communications, while AST SpaceMobile is working with Vodafone, Rakuten, AT&T and Verizon, among others. Verizon also offers satellite connectivity through its Skylo relationship.
In these partnerships, the wireless operators often are using their terrestrial spectrum, while satellites act as cell towers in the sky, bridging gaps between cell towers on land. With SpaceX, T-Mobile offers a commercial direct-to-device service, called T-Satellite, providing emergency texting along with connectivity for some apps. But all the operators hope to provide more comprehensive mobile services in the future.
SpaceX buys satellite spectrum from EchoStar
In September, a significant event occurred in the ecosystem of satellite and mobile operators when SpaceX struck a deal to purchase EchoStar’s AWS-4 and H-block spectrum licenses for about $17 billion.
SpaceX President and COO Gwynne Shotwell said that with the new spectrum, “SpaceX will develop next generation Starlink direct-to-cell satellites, which will have a step change in performance and enable us to enhance coverage for customers wherever they are in the world."
And in one fell-swoop, it’s possible that SpaceX could become a mobile operator in its own right. Or, at the least, disrupt the competitive landscape of the wireless industry.
In one telling quote, SpaceX founder and CEO Elon Musk said, “To be clear, we’re not going to put the other carriers out of business. They’re still going to be around. They own a lot of spectrum. But yes, you should be able to have a Starlink – like you have an AT&T or a T-Mobile or a Verizon or whatever – you could have an account with Starlink that works with your Starlink antenna at home.”
Musk is saying he could potentially bundle SpaceX’s Starlink fixed broadband service with a SpaceX mobile service that works everywhere, even in remote locations. So in the future, a SpaceX customer could get their home broadband and ubiquitous mobile service in one compelling bundle.
More recently, SpaceX asked the FCC for authority to launch a new constellation of up to 15,000 satellites to provide direct-to-cell services.
Many analysts in the telecom industry are saying there’s no reason for mobile operators to be overly concerned about Musk becoming a wireless operator because the spectrum that he’s buying doesn’t provide enough capacity compared to the mid-band 5G services delivered by terrestrial operators today.
However, these analysts tend to focus strictly on the technology barriers and ignore the fact that disruption can also happen on the business front, depending on which partners Musk ultimately works with.
Currently, SpaceX is working with T-Mobile, which will indirectly benefit from SpaceX’s new spectrum because it will fill in gaps in coverage across the entire U.S. for T-Mobile’s T-Satellite service.
Operators working with AST SpaceMobile
Several operators have partnered with AST SpaceMobile, but the satellite operator still has a long way to go to launch enough satellites to provide global coverage.
However, in October, AST SpaceMobile said it would provide Verizon with direct-to-cell service when needed for Verizon customers, starting in 2026.
“Through our definitive commercial agreement with Verizon, we are working to deliver space-based cellular broadband coverage from space across the continental United States,” said Abel Avellan, founder, chairman and CEO of AST SpaceMobile, in a statement.
Turning cell phones into satellite phones
One thing that makes the satellite-telecom ecosystem more complex is Apple’s work with Globalstar to enable satellite emergency texting on iPhones. This relationship is different than wireless operators working with satellite operators. Instead, the relationship between Apple and Globalstar focuses on the cell phone.
For several decades, companies such as Iridium, Globalstar and Inmarsat offered direct-to-device satellite connectivity using mobile satellite service (MSS) spectrum and special satellite phones. But in September 2022, Apple shook up the ecosystem, announcing a partnership with Globalstar to create iPhones that are compatible with Globalstar’s MSS.
Now, the iPhone 14 and later models can send a text for emergency services when outside of cellular coverage. They must have a clear view of the sky for the service to work, but essentially, the iPhone becomes a satellite phone for emergency texting. However, it’s not a satellite phone in the full sense of providing voice and broadband. In the future, Apple and Globalstar plan to improve the service to offer more than just emergency texting.
However, there’s a wrinkle in Apple’s partnership with Globalstar. The Information just recently reported (subscription required), that SpaceX may be negotiating with Apple to create cell phones that would support the spectrum that SpaceX is buying from EchoStar.
If true, this would be bad news for Globalstar, which could be left out of an Apple/SpaceX collaboration.
A word about satellite spectrum
Satellite operators use several portions of the radio frequency spectrum to achieve coverage for mobile or fixed satellite services. Mobile satellite service (MSS) spectrum includes the L band (1-2 GHz) and the S band (2-4 GHz).
New America just published a comprehensive satellite report, including this chart, showing the MSS bands.
The spectrum that SpaceX is purchasing from EchoStar is the AWS-4 and H-block licenses, which are in the 1900-2200 MHz region, right in the sweet spot of MSS spectrum.
Michael Calabrese, director of the Wireless Future Program & Senior Advisor of the Open Technology Institute at New America, noted that there’s very little MSS spectrum. “It’s all around 2 gigahertz, mostly, and only three or four operators have it,” Calabrese told Fierce. “So that's one reason why SpaceX wanted the EchoStar spectrum, because it was the most and the best, and it's a single assignment.”
The bottom line to all the latest activity between satellite and telecom operators is: Watch out for SpaceX. The company is not only stealing market share from terrestrial broadband providers, but it’s making some fast moves and interesting partnerships in the mobile wireless realm. And the richest man in the world is a disruptor.
For the free Fierce Network Research report “Satcoms + telecom: A match made in the heavens,” click here to learn about multi-orbig connectivity.