US operator AT&T has reached a significant deal with AST SpaceMobile to provide what they assert will be the first complete space-based broadband service directly to standard mobile phones, although a specific launch date was not disclosed.
The six-year agreement supersedes the previous memorandum of understanding (MoU) signed by the two companies in 2020.
AT&T is also a strategic investor in the direct-to-device satellite provider, with a commitment of “$20 million in revenue,” as stated in an AST SpaceMobile investor presentation last month. This investment is made alongside Google and Vodafone Group, with the trio collectively investing $110 million in ten-year subordinated convertible notes.
In addition to AT&T, AST SpaceMobile is collaborating with Rakuten Mobile, Rogers Communications, Orange, Vodafone, and American Tower to address internet connectivity gaps. However, AT&T is the only commercial partner announced thus far.
A representative for AT&T informed Mobile World Live (MWL) that it is premature to provide a specific date for the service’s availability. However, with a formal agreement in place, the representative stated that they would be working towards a commercial launch.
The service is designed to seamlessly integrate with the operator’s wireless network and address coverage gaps in remote and off-grid locations by connecting with customers’ existing devices when necessary, according to the AT&T representative.
In its Q1 earnings report released on May 15th, AST SpaceMobile stated that its initial five satellites would enable nationwide, non-continuous service across the US, with over 5,600 cells in premium low-band spectrum.
While AST SpaceMobile had initially targeted the launch of five BlueWalker 3 satellites in Q1 2024, CEO Abel Avellan stated during the earnings call that these satellites would be transported to the launch site between July and August, with launches to follow shortly thereafter. It will take several months for the satellites to reach the correct orbit.
AST SpaceMobile anticipates spending $150 million on the first five satellites, with over 95% of the expenditure already incurred. Over the next two quarters, it plans to invest approximately $25 million to $40 million in capital expenditure.
Differentiating itself from rivals, AST SpaceMobile aims to offer more than just SMS or emergency messaging. Avellan emphasized that the collaboration with AT&T would enable text, voice, and streaming services across a variety of subscription packages.
Chris Sambar, AT&T’s head of network, will soon join AST SpaceMobile’s board of directors. In 2023, AT&T agreed to lease spectrum to AST SpaceMobile, furthering its strategy to facilitate communication with standard mobile phones.
AST SpaceMobile faces competition from other direct-to-device service providers such as Lynk Global, Starlink, and Amazon’s Project Kuiper.
