AST SpaceMobile: The First Space-Based 5G Cellular Broadband Connectivity for Consumer Smartphones, More to Come from SatCom?

On September 19, 2023, AST SpaceMobile announced a historic milestone: the successful completion of the first-ever 5G connection for both voice and data transmission between an ordinary, unmodified smartphone and a space satellite. The company's engineers showcased this space-based 5G connectivity by initiating a call from Maui, Hawaii, United States, to a Vodafone engineer situated in Madrid, Spain. This remarkable feat was accomplished using AT&T's Band 5/850 Megahertz (MHz) spectrum and AST SpaceMobile's BlueWalker 3 (BW3) test satellite—the largest-ever commercial communications array deployed in Low Earth Orbit (LEO). The 5G call was initiated on September 8, 2023 from an unmodified Samsung Galaxy S22 smartphone positioned near Hana, Hawaii, in a wireless dead zone. AST SpaceMobile collaborated with its partners Vodafone, AT&T, and Nokia to conduct comprehensive 5G connectivity testing. In a separate test, the company also mentioned that it had surpassed its previous record for space-based cellular broadband data sessions by achieving an impressive download rate of approximately 14 Megabits per Second (Mbps).

In the past year, there has been a growing discussion surrounding the convergence of satellite technology with consumer smartphones. Prominent companies that include Apple, Huawei, ZTE, Globalstar, Qualcomm, Iridium, SpaceX/Starlink, T-Mobile, Motorola, Bullitt, AST SpaceMobile, Rakuten Mobile, Vodafone, and AT&T have entered into strategic partnerships within the consumer mobile, Mobile Network Operator (MNO), and satellite industries. Recently, in August 2023, Huawei introduced the Mate 60 Pro, its latest flagship smartphone featuring satellite calling capabilities (see ABI Insight, “Non-Terrestrial Network (NTN) Connectivity: Huawei’s First Smartphone to Support Satellite Calls—More on the Horizon?”). Following this, during the September 2023 iPhone 15 launch event, Apple launched its new satellite service, the Roadside Assistance via satellite, in partnership with the American Automobile Association (AAA). Huawei’s Mate 60 Pro will connect to China’s Tiantong-1 communication satellite system, consisting of three Geosynchronous Earth Orbit (GEO) satellites for its satellite calling service, while Apple will use Globalstar's LEO connectivity constellation for its emergency satellite services.

AST SpaceMobile's recent announcement further underscores its progress in commercializing its SatCom technology. In June, the company accomplished a milestone by successfully delivering 4G capabilities to standard smartphones through its BW3 satellite, as detailed in ABI Insight "AST SpaceMobile: Successfully Beaming 4G Capabilities to Standard Smartphones from Space, but Is More to Come from SatCom?" Earlier, in April 2023, the company also achieved another significant feat by completing the first-ever two-way voice call from space to a standard smartphone, specifically a Samsung Galaxy S22. This news was also covered in brief in “AST SpaceMobile completes the first ever space-based voice test. More to come from the convergence of the Satellite and Telco Industries?”

The development of SatCom technology in the past year has demonstrated impressive progress. It has transitioned from its early stage of one-way, text-based applications primarily for niche emergency satellite services to more advanced functionalities like two-way messaging, two-way voice calls on unmodified smartphones, satellite calling, 4G capabilities, and now, the integration of 5G spectrum connectivity. With a view to the future, there are expectations that SatCom technology will continue to evolve to eventually offer a wide range of additional functionalities, such as web browsing, file downloads, access to messaging apps, location-based services, and even the potential for more data-intensive video streaming through satellite connectivity.

With influential smartphone manufacturers, major satellite operators, and MNOs all entering the satellite-to-mobile market, the future of SatCom for consumer mobile devices appears highly promising. ABI Research anticipates that the Non-Terrestrial Network (NTN) mobile segment will generate service revenue of approximately US$18 billion and facilitate approximately 200 million connections by 2031. This projection represents a Compound Annual Growth Rate (CAGR) of 59% in service revenue from 2024 to 2031, underscoring a substantial growth trajectory in this sector. (For more detail, refer to ABI Research's The Role of Satellite in 5G: Non-Terrestrial Networks (NTN) Mobile report (AN-5515) and SatCom Constellations: Deployments & Subscriptions market data (MD-SATCC-102).) It's important to highlight that in ABI Research’s market data, the NTN mobile segment consists of three market segments: the NTN-unmodified, the market where operators such as Starlink, AST SpaceMobile, and Lynk focus on connecting unmodified Commercial Off-the-Shelf (COTS) devices by reusing their partnering MNOs’ Long Term Evolution (LTE)/5G spectrum to bring services to mobile subscribers, and the Narrowband-NTN (NB-NTN)/Internet of Things-NTN (IoT-NTN) and New Radio NTN (NR-NTN) segments, where consumer mobile vendors such as Apple, Motorola, Qualcomm, Huawei, ZTE, and others partner with satellite operators directly to provide satellite services to their devices with dedicated NTN-mobile processors and modems. (For more detail, refer to ABI Insight, “KDDI Partners with Starlink for Satellite-to-Cell Services: Navigating the Changing Landscape of the NTN-Mobile Market.”)

The SatCom market for NTN-mobile has significant potential for profitable opportunities. ABI Research recommends that market participants within the unmodified smartphone value chain should keep an eye on two potential business prospects:

1. Reduced Network Costs, Increased Market Size and Use Cases: Integrating NTNs into existing cellular networks will transform the financial dynamics linked to network expansion. This applies to not only the initial setup expenditure, but also the continuous operational costs associated with NTN connectivity. Consequently, this shift is poised to enhance the accessibility and affordability of the services made possible by NTN connectivity. Numerous use cases stand to create potential value for operators in this context. These include delivering rural consumer broadband using unmodified NTN mobile devices, offering SatCom services for rural business applications such as forestry, mining, and agriculture, subscription-based “Satellite Roaming Services,” as well as providing emergency services through satellite mobile handset connectivity.
2. More MNOs to Partner with Satellite Operators: AST SpaceMobile, SpaceX/Starlink, and Lynk Global have actively participated in developing satellite networks that seamlessly integrate with unmodified standard smartphones. By facilitating direct SatCom with conventional smartphones, these satellite networks offer a solution to bridging the coverage gaps often found in traditional terrestrial cellular networks. This development has spurred MNOs to explore the potential of incorporating satellite services into their network ecosystems to achieve comprehensive coverage. Leading MNOs such as T-Mobile, AT&T, Rakuten Mobile, Telefónica, Telstra, Vodafone, Orange, Zain, and others have entered into explicit partnerships with satellite operators such as AST SpaceMobile, Lynk Global, and SpaceX. These collaborations have a shared goal for the MNOs: to bolster their terrestrial coverage and, ultimately, enable individuals using standard consumer smartphones to access their voice, messaging, and data services from anywhere on Earth. ABI Research anticipates that the trend of MNOs teaming up with satellite operators will continue to see positive growth and that MNOs should look to partnerships with satellite operators to strengthen their connectivity options and expand their coverage. Furthermore, given that MNOs do typically lack expertise in SatCom, forming partnerships with the SatCom operators would be the most effective approach for the MNOs to enter the satellite-to-mobile market opportunity.

ABI Research forecasts a promising future for the NTN-unmodified segment, with an expected increase in satellite-to-mobile connectivity adoption. Additionally, there's an anticipation of continued strategic collaborations between satellite operators in this value chain and MNOs. However, it's essential for market participants to maintain realistic expectations for satellite-to-mobile services because the market is still in its early stages and widespread consumer adoption has yet to materialize.