AT&T Inc. and AST SpaceMobile Inc. have joined forces to provide wireless service from space, a move that challenges Elon Musk’s SpaceX, which had struck a similar deal two years ago with T-Mobile US Inc. This partnership between AT&T and AST SpaceMobile has been formalized following an earlier testing period, and the agreement to build a space-based broadband network will run through 2030.
AT&T’s head of network, Chris Sambar, will join the AST SpaceMobile board, deepening a relationship that dates back to at least 2018. Sambar expressed confidence in AST SpaceMobile’s technology, as demonstrated by the performance of the BlueWalker 3 test satellite. The relationship is moving from a loose partner to a strategic partner, he said.
Wireless providers are racing to offer connections for the world’s estimated 5 billion mobile phones when those devices are in remote areas beyond the reach of cell towers. These services hold the promise of connectivity along rural roads and in places like national parks. The service is typically marketed as a supplement to standard wireless coverage.
The new network will work with ordinary mobile phones, offering a level of convenience that’s lacking in current call-via-satellite services, which require the assistance of bulky specialized equipment. Shares of Midland, Texas-based AST SpaceMobile gained about 35% to $3.25 in extended trading after closing at $2.39 in New York. AT&T was little changed.
AST SpaceMobile will deliver five satellites to Cape Canaveral, Florida, in July or August with launch on a SpaceX rocket expected shortly thereafter. The satellites will be operational about three months after launch. Because the satellites fly around the Earth quickly, they will be overhead and in position to relay signals a few times a day. It will take 45 to 60 spacecraft to offer continuous service. Initial markets include the US and Japan.
Jeff McElfresh, AT&T’s chief operating officer, stated that space-based direct-to-mobile technology is designed to provide customers connectivity by complementing and integrating with their existing mobile network. This agreement is the next step in their industry leadership to use emerging satellite technologies to provide services to consumers and in locations where connectivity was not previously feasible.
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