Over the past six months there’s been a flurry of developments in satellite-to-cellular connectivity culminating with Apple’s launch of its “Emergency SOS via Satellite” service last November using Globalstar’s satellite network. The service, which offers text messaging capability in areas without cellular coverage, is available to customers with an iPhone 14 and is free for two years. While Apple is the first to commercially offer a satellite-to-cellular service, there are several similar services in the works that are expected to make their debut soon.
Qualcomm partnered with Iridium earlier this month to deliver satellite-to-cellular connectivity to Android smartphones. Called Snapdragon Satellite, the two-way messaging service is expected to be available in several Android smartphones by mid-year. And Bullitt Group, a British manufacturer specializing in rugged mobile phones, is launching a new smartphone with satellite messaging that connects to Skylo and uses existing satellite constellations. The service will be commercially available in North America and Europe this quarter, the company said.
In addition, satellite company Lynk Global said it expects to launch its satellite-to-cellular service in April. The company has three commercial satellites in orbit, and its technology makes it possible to connect any cellular device operating today to its satellite network because it can fool the cellular device into thinking that the satellite is a nearby cell tower. Lynk says it has agreements with 25 mobile operators, including some in North America.
But there’s more. Last August T-Mobile and SpaceX’s Starlink formed a technical partnership with the intention of connecting T-Mobile subscribers outside cellular coverage with Starlink satellites. But first Starlink has to construct special antennas for its satellites to make this work, and neither Starlink nor T-Mobile has provided a timeline for when the service will be available.
In addition, AT&T revealed that it is working with AST SpaceMobile on a consumer application that will use satellite connectivity. So far there are few details about that application or when it might be commercially available. Plus, Verizon in 2021 said that it was working with Amazon’s Project Kuiper for cellular backhaul and also to provide connectivity for unserved and underserved communities. But Amazon has not yet launched any satellites. The company said last October that it was planning to send two prototype satellites into space early this year using United Launch Alliance’s new Vulcan Centaur rocket.
The flurry of announcements has been a big boost for satellite companies like Iridium and Globalstar that have struggled to reach a large number of consumers because their equipment is expensive and proprietary.
Lluc Palerm-Serra, principal analyst with NSR, an Analysys Mason company, calls the opportunity for satellite companies like Iridium and Globalstar “transformational” because it makes it possible for these companies to reach billions of consumers through mainstream devices. NSR estimates that this service will attract potentially 386 million users by 2030 and deliver as much as $66.8 billion in 10-year cumulative revenues for the satellite industry.
Business models still in flux
The business potential may be huge for satellite players but for wireless operators the business model is not clear-cut. Palerm-Serra believes that a variety of business models will emerge as these services become commercially available. For example, he said that some operators will probably sell a day-pass or pay-per-GB package for consumers that want satellite connectivity when they are outside their cellular coverage area. Alternatively, some mobile operators might just bundle the satellite service with their premium price plans and offer it as a free benefit to their most desirable customers.
Palerm-Serra also said that he believes satellite connectivity may result in big opportunities for IoT companies, first responders and government/military users because these users need connectivity everywhere.
Lynnette Luna, senior research analyst with S&P Global, thinks some wireless operators will use the satellite service as a differentiator, to show that they “stand for safety” and bundle it into their premium rate plans. But she thinks that it will be difficult for any mobile operator to sell satellite connectivity as a safety service because Apple is already offering it for free to their iPhone 14 users.
Luna also is skeptical about mobile operators offering satellite connectivity as a broadband service in unserved areas. “It’s too expensive for broadband. I don’t see any evolution,” she said.
Lynk Global CEO Charles Miller said that most of his company’s agreements with operators include a revenue share in which Lynk takes a portion of the revenues the operators charge their customers for use of the Lynk network. The other business model involves Lynk charging operators based on network usage. Miller said that he’s concerned that if wireless operators provide satellite services to their customers for free, there will be too much demand.
I expect to hear more about satellite-to-cellular connectivity in the coming months as the technology develops and the business models become more solidified. Of course, this isn’t the first time satellite technology has been viewed as the answer for providing coverage in hard-to-reach areas where cellular coverage doesn’t exist. Making satellite connectivity more affordable to the masses isn’t going to be easy.
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