SpaceX/T-Mobile Space-Cellular Plans Point to Booming Market
SpaceX and T-Mobile's partnering on satellite-to-cellular service is the latest competition in what's becoming an increasingly crowded market, said satellite executives and industry watchers. SpaceX and T-Mobile announced plans Thursday for SpaceX coverage, using mid-band T-Mobile PCS spectrum, to provide voice and messaging service in parts of the U.S. and territorial waters not covered by T-Mobile's network. Some see SpaceX/T-Mobile raising regulatory issues.
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"We are seeing signals from all over the country, "This is a huge market, me too,'" Lynk CEO Charles Miller told us. With six satellites in space, contracts with 14 mobile network operators and testing going on in 10 markets, Lynk plans to start offering commercial service later this year, he said: "This is coming sooner than people think."
AST SpaceMobile Chief Strategy Officer Scott Wisniewski said in an interview he doesn't expect SpaceX entering the space to affect AST's U.S. market access request pending since 2020 before the FCC. "We are kind of on our own track," he said. AST has been authorized in seven nations, with others in process, and has 25 mobile network operator partners, he said. It plans to launch a 700-square-foot phased array antenna in September to do testing with MNOs, he said. He said the company expects to start offering commercial service after a planned launch in late 2023 of additional satellites. "We always expected there would be competition. It is not surprising others want to join," he said.
T-Mobile urged the FCC to deny U.S. market access for AST on the grounds that terrestrial mobile spectrum shouldn't be used for satellite services (see 2011040003). T-Mobile didn’t comment Friday.
SpaceX/T-Mobile raises the same issues AST and Lynk do -- that using terrestrial spectrum on a satellite is inconsistent with the table of allocations both domestically and internationally and raises potential interference issues, Jennifer Manner, EchoStar senior vice president-regulatory affairs, told us. EchoStar pushed for denial of AST's and Lynk's pending applications, asking the FCC to launch a general proceeding on the implications of reallocating wireless frequencies for use by satellite systems (see 2206290004). The agency didn't comment Friday.
Companies proposing new uses for spectrum almost always face interference red flags raised by adjacent or existing users, LightShed Partners' Walt Piecyk and Joe Galone wrote in a note. "This has bottled up the process for companies for multiple years if not a decade plus," they said, saying Dish Network, with spectrum adjacent to the mid-band spectrum SpaceX would use, "is not shy about making filings and using the courts. Good luck." They said the T-Mobile partnership could hurt SpaceX's arguments for keeping 5G out of the 12 GHz band: "If SpaceX can add new spectrum in its Gen2 constellation, wouldn’t this reduce their claimed need for 12 GHz spectrum?"
The SpaceX partnership "leveled [T-Mobile's] playing field with Verizon and AT&T," who are working on similar products, with AT&T working with AST and Verizon with Amazon's Kuiper, New Street Research's Philip Burnett wrote investors Friday. He said T-Mobile also has an advantage in that SpaceX has more expertise than ]Kuiper, which hasn't launched a satellite.
AT&T and OneWeb in 2021 announced they were joining on better access for AT&T business customers in "remote and challenging geographic locations."
The T-Mobile/SpaceX partnership is a boon for emergency communications in remote locations, but it doesn't alter the U.S. mobile operator competitive landscape, GlobalData analyst Tammy Parker said. There eventually could be dueling satellite-to-cellular offers in the U.S., she said, noting Verizon's partnership with Amazon's Kuiper.
The joint Coverage Above and Beyond offering will mean "the end of mobile dead spots," T-Mobile CEO Mike Sievert said at the announcement. He said beta testing of messaging will happen in 2023, and the aim is international coverage via "reciprocal roaming" agreements with other wireless carriers around the world, with those carriers also providing mid-band spectrum for SpaceX use.
The SpaceX/T-Mobile service would provide 2 Mbps to 4 Mbps of coverage per cell zone, allowing 1,000 to 2,000 simultaneous voice calls in those zones, SpaceX CEO Elon Musk said. He said it should work with most phones without additional hardware, "even in your pocket or your car." The service "is not a substitute" for traditional terrestrial cell stations, and the service those provide, especially in urban and suburban areas, "will definitely be superior," he said. Musk said texting and emails don't need real-time connections and such asynchronous communications could work even with just a few second-generation satellites in orbit.
Musk said the technology is "quite a difficult technical challenge.” He said T-Mobile and SpaceX have satellite-to-cellular service working in lab conditions “and we’re confident it will work in the field." Sievert said a phone using the service won't know it's connecting to a satellite but will pick up SpaceX coverage the way it would any terrestrial coverage.
T-Mobile will include the satellite-to-cell service in its most-popular plans for free, though not in some low-cost plans, Sievert said. Asked about using SpaceX for its mobile network's backhaul, Sievert said "we are open ... and we are partners now."