Mobile SCS Seen Becoming Commonplace Offering by Carriers, Handset Makers
Smartphones with mobile supplemental coverage from space (SCS) service will be the norm within a handful of years, with it becoming inevitable that every handset will offer the capability and all mobile carriers will partner satellite operators on direct-to-device service offerings, mobile and satellite industry experts told us. Others question the demand for SCS service.
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SCS will become a ubiquitous service providing wideband speeds, but that's at least three to five years out, Northern Sky Research analyst Lluc Palerm said. Emergency alerts, such as the service Globalstar is providing for newer iPhones, will be joined soon with messaging capability, such as Bullitt's announced service with Skylo, he said, noting satellite-enabled voice "will take a while" and might be two or more years out. Wideband data to smartphones needs further standards development and enough satellite capacity in orbit, he said. Mobile operators' satellite partnerships also will let them unlock new use cases like IoT and connected vehicle offerings that can't be done with terrestrial coverage alone, Palerm said.
Some carriers, such as AT&T and Vodafone, are being particularly aggressive in the SCS space, but others are being more cautious, Palerm said, citing Verizon not having announced any satellite partnerships. Verizon didn't comment. Palerm said it's challenging for mobile operators to select the right satellite partners due to satellite operators' different spectrum strategies. Those using mobile operators' spectrum can be faster to market, but there are questions about performance and interference with terrestrial service, he said. SCS services using S- and L-band satellite spectrum can't be backwards compatible to older smartphones, so their market ramp-up will be slower, but they could face easier regulatory approval, he said.
The 3rd Generation Partnership Project's Release 17 opened the door to incorporating satellite into terrestrial mobile networks, and any smartphone compliant with Release 17 will have that capability, Palerm said. As releases 18 and 19 arrive, capabilities will improve, spreading to lower-end smartphones, so SCS reaches all levels and tiers of devices, he said.
Every smartphone eventually will be satellite capable, but SCS is inherently capacity-limited, Recon Analytics' Roger Entner said. It's best suited for service in rural and remote areas where there's no existing service and no interference issues from terrestrial use of the spectrum, he said. The cost of mobile carrier/satellite operator partnerships could be wrapped into subscribers' monthly bills, Entner said. For handset makers, SCS can be a product differentiator, he said.
Satellite connectivity so far isn't driving big consumer demand, said Cliff Maldonado, principal analyst for mobile computing industry analysis firm Bay Street Research. Upgrades to the iPhone 14 were particularly low, largely due to strong iPhone 12 and 13 sales. Surveys of consumer interest in the iPhone 15 likewise haven't found notable consumer interest, he said. He said it's unclear how much of the mobile market finds itself on a regular basis without coverage, and it's also unclear how much that subset of the smartphone subscriber population is willing to pay for such satellite-enabled connectivity. With cable ISPs moving into mobile service and Dish Network's terrestrial network, there's considerable consumer confusion on what direction to go, he said. "Everyone's a bit overwhelmed," he said.
The satellite industry already provides cost-effective communications to airlines, emailed consultant John Strand, "The business case is good, and when people fly, the willingness to pay for access to the internet is very high," he said. It's unknown whether customers are willing to pay extra for satellite connectivity on their mobile phones and how much a mobile operator is willing to pay for its customers to be able to access an additional network, he said. That willingness is probably not high, as satellite connectivity competes with better mobile coverage and Wi-Fi in a lot of places, he said. "I'm not an optimist, it's easier to write stories about what you can do with the combination of mobile and satellite than it is to get customers to pay for the extra functionality," he said. Citing Motorola's launch of Iridium, Strand said there's "great risk" other satellite operators have the same fate of bankruptcy. He said consolidation in the satellite industry is likely.