AST SpaceMobile completes the first ever space-based voice test. More to come from the convergence of the Satellite and Telco Industries?

AST SpaceMobile, a U.S.-based satellite manufacturer, achieved a historical milestone in satellite communication technology in April 2023 with the first-ever two-way voice call from space to an unmodified smartphone. This groundbreaking accomplishment was made possible through the use of the AST SpaceMobile BlueWalker 3 (BW3) satellite. The BW3 satellite operates as a Low Earth Orbit (LEO) cellular base station, enabling the transmission of voice, video, data, and Internet access across the 2G, 4G, and 5G bands. The inaugural "space call" was placed from a Samsung Galaxy S22 smartphone located in Midland, Texas. It utilized the 850 Megahertz (MHz), band 5, mobile spectrum from AT&T, which was directly connected to a BW3 satellite to establish a connection with Rakuten Mobile, Japan’s fourth major Mobile Network Operator (MNO).

Over the past year, there has been a growing discussion surrounding the convergence of satellite technology and consumer smartphones. Companies such as Apple, Globalstar, Qualcomm, Iridium, SpaceX, T-Mobile, Motorola, Bullitt, AST SpaceMobile, Rakuten Mobile, Vodafone, and AT&T, among others have formed strategic partnerships within the consumer mobile, MNO, and satellite industries. However, despite these developments, the initial tests and products, such as the emergency satellite services offered by Apple/Globalstar and Qualcomm/Iridium, have thus far been limited to text-based applications.

AST SpaceMobile's achievement in facilitating two-way voice calls through satellite-to-mobile connections on unmodified smartphones represents a major milestone in the growing field of satellite-to-mobile communication technology. Demonstrating the ability to establish voice communication is a remarkable technological advancement and it marks a significant leap forward within this domain.

How Space-Based Communication with Unmodified Smartphones Works

AST SpaceMobile aims to establish a direct connection between standard consumer smartphones and a space-based cellular broadband satellite network. The company accomplishes this by utilizing a constellation of Low Earth Orbit (LEO) satellites functioning as "cell towers" to provide a satellite-based cellular broadband network. When a user sends a signal from their device, it is transmitted to the nearest AST SpaceMobile satellite, which then relays the signal to the ground-based cellular network. This enables users to make calls, send texts, and access data services worldwide, even in regions with limited or no traditional terrestrial cellular coverage. To ensure seamless connectivity, the AST SpaceMobile system uses a mesh network architecture to route signals through other satellites when out of range. Importantly, the AST SpaceMobile satellite network seamlessly integrates with existing cellular networks, thereby making it easier for MNOs to provide their customers with global coverage without requiring costly infrastructure investments.

Satellite Operators and MNOs: Strengthening Connectivity through Partnerships

AST SpaceMobile, SpaceX/Starlink, and Lynk Global have been actively engaged in the development of satellite networks that seamlessly integrate with standard smartphones. By enabling direct Satellite Communications (SatCom) with standard smartphones, these satellite networks can help bridge coverage gaps in traditional terrestrial cellular networks. And this has prompted MNOs to explore the possibilities of integrating satellite services into their network ecosystems to achieve ubiquitous coverage. MNOs such as T-Mobile, AT&T, Rakuten Mobile, Telefónica, Telstra, Vodafone, Orange, Zain, and others have expressly partnered with satellite operators like AST SpaceMobile, Lynk Global, and SpaceX. The objective of these collaborations for the MNOs is to enhance their terrestrial coverage and to enable individuals with standard consumer smartphones to access their voice, messaging, and data services from any location on Earth.

SatCom: A Potentially Big Market for MNOs

Satellite-based cellular infill can be particularly advantageous in areas where terrestrial cellular networks have limited coverage or where additional coverage is necessary to fill gaps in existing networks. Satellite technology also offers notable benefits in rural or remote regions where constructing terrestrial cell towers may not be cost-effective, or in areas affected by natural disasters or other emergencies that disrupt terrestrial infrastructure. This presents a potentially significant market opportunity for MNOs, as there are more than 500 million workers worldwide in business-critical and mission-critical sectors according to a SatCom presentation by Motorola and Bullitt. These sectors encompass a wide range of professions, including rural workers, transportation, forestry, logistics, utilities, emergency services, first responders, police, firefighters, charitable organizations, and Non-Governmental Organizations (NGOs). Recent ABI Research data also estimated that the Non-Terrestrial Network (NTN) mobile service segment (which includes the satellite-to-mobile segment) will reach 6.8 million subscribers by 2027 (see SatCom Constellations: Deployments & Subscriptions).

Two Possible Challenges

While SatCom for MNOs presents the possibility of a lucrative venture, there are two notable challenges to consider:

1. Significant Investment and Rising Costs: One major challenge is the significant financial investment required for infrastructure, which includes the development and launch of satellite constellations, ground stations, and related equipment. This can place a significant financial burden on both satellite operators and MNOs, necessitating a long-term commitment to the project. Additionally, rising financing costs due to interest rate hikes and price inflation can also impose a heavy financial burden on both parties. AST SpaceMobile announced in March 2023 that the launch of its first commercial satellites, originally planned for 2023, has been delayed to 2024 due to rising costs from inflation, supply chain disruptions, and increased costs of electronic components, among other factors.
2. Regulatory Approval: Another potential roadblock is regulatory approval, as satellite-based networks may be subjected to various licensing and spectrum allocation requirements that can vary from country to country. Obtaining regulatory approval can be a time-consuming and complex process, and failure to obtain the necessary permissions can delay or even halt deployment.

Despite the challenges, ABI Research forecasts that collaborations between satellite operators and MNOs will have a promising future, and that more MNOs would be expected to form alliances with satellite operators to expand their network coverage. Furthermore, improvements in satellite technology are expected to enhance direct satellite-to-mobile services, while also simultaneously lowering costs, thereby making satellite connectivity solutions more accessible and affordable for both personal and commercial use. As a result, satellite-to-mobile connectivity adoption is expected to increase. It would be important though for market participants to exercise caution and to have a well-defined business model in order to effectively seize opportunities in the value chain.