While the technology and business model for satellite services has made significant strides, launching a sufficient number of satellites to support coverage needs is not for the faint of heart, explained JR Wilson, VP of tower strategy and planning at AT&T.
“It’s still a very capital-intensive business which comes with a lot of risk. The financial costs are exorbitant to launch a system and then you must have a marketable product that generates demand from customers to satisfy the business case.”
The company, which recently joined with Google, Rakuten Group and Vodafone Group to invest up to $206.5 million in satellite broadband provider AST SpaceMobile, has been testing the service with the one satellite in orbit.
“This has been a phase of extensive testing and we’ve got a lot of industry firsts in terms of voice, data capability and also 5G video calling. We expect that AST SpaceMobile will launch another five satellites sometime in the first half of 2024. So, this year will see more proving of our test case and developing the commercial framework that we intend to go to market with,” said Wilson.
“I would expect to see a commercial launch during 2025, but I don’t have an exact date. If the tests using the first six satellites enable us to gain full confidence in the network, then we’ll say let’s launch the rest of the constellation.”
The AT&T executive said the business modelling undertaken had been based on a very conservative scenario. “But given the success we’ve seen with the US public emergency service, we think the business case works. I don’t think AT&T would have made that investment in AST SpaceMobile without having a lot of confidence in the underlying business case, including our ability to sell it to our customers at a very affordable cost.”
While AT&T will only be looking at launching this service in the US, AST SpaceMobile believes this will require around 45 satellites, with 90 being needed for global coverage.
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