In the early 1960s, US President John F. Kennedy set a bold vision for sending astronauts to the moon by the end of the decade. A moon landing was intended as a show of force, given the geopolitical landscape of that era. The result was a legendary space race between the United States and the Soviet Union, chronicled in countless documentaries and some of my favorite films, including The right things AND Apollo 13.
Today, a new space race in telecommunications is emerging. Constellations of low Earth orbit (LEO) satellites promise to disrupt mature, high-altitude geosynchronous earth orbit (GEO) deployments. The communication advantages of LEO are undeniable: lower latency given the shorter distance, lower energy requirements and flexibility, because unlike GEO the technology does not require a fixed connection point. GEO’s limitations have also made it very expensive for subscribers and difficult to scale, given the significant investments required in both satellite construction and terrestrial infrastructure.
The latter is what LEO hopes to disrupt. At times it can feel like a billionaire boy’s club, with Jeff Bezos and Elon Musk front and center, each touting what he’s doing in the space. However, Starlink and AST SpaceMobile are emerging as the early leaders in the LEO telecommunications world. I had the opportunity to speak with some of the participants in this field to complement my other research. So, let’s dive in!
Story of LEO
Credit OneWeb for kickstarting LEO’s telecommunications efforts in 2012. Founded as WorldVu, the company later changed its name as it aimed to launch satellite broadband services with spectrum acquired from the bankruptcy of SkyBridge. While OneWeb has gotten some funding over the years, it has stumbled in its implementation efforts, ultimately failing less than three years ago. While OneWeb has emerged from its financial woes with new public and private investments and a focus on fixed broadband with dedicated equipment, it has enabled two others to overtake it in the space race to LEO and become the first runners to increase coverage for everyday cellular devicesStarlink and AST SpaceMobile.
Starlink probably needs no introduction, given its association with Musk’s SpaceX operations. It delivers broadband internet services to rural areas underserved by cable, fibre, LTE and 5G fixed wireless access services and is supported by over 4,000 satellites launched to date. Longer term, Musk promises to boost that number to 30,000 birds in the sky with a reusable design that aims to reduce satellite construction costs. That said, Musk has a track record of overpromising and underdelivering, as evidenced in his Tesla operations and recent stumbles with SpaceX.
One of the other significant challenges is that Starlink’s initial service was fraught with both expensive consumer equipment and poor performance. These challenges could resolve themselves over time with scale, but the announcement of the company’s partnership with T-Mobile late last year may be premature.
Initially, the Starlink service focuses on enabling emergency text messaging in poor coverage areas using T-Mobile’s midrange spectrum assets, with plans to add voice and data at a later date. What needs to be clarified now are the specific rollout plans and whether they could create interference with terrestrial mobile networks. Specific details are currently lacking, prompting other operators like AT&T to file concerns with the FCC through the newly formed Space Bureau.
AST SpaceMobile it may not be as familiar to the public as Starlink and SpaceX. The company was founded in 2017, but its roots go much deeper. Founder, CEO and President Abel Avellan spent time with Ericsson early in his career before founding Emerging Markets Communications which served the maritime industry and other mobility markets in the late 1990s. Eventually Avellan sold the company for over half a billion dollars.
Over the past seven years, AST SpaceMobile has invested $725 million in research and development with the help of industry backers that include Vodafone, American Tower, Rakuten Mobile, Bell Canada and Samsung, resulting in 2,600 patents assigned or pending. While the patent count isn’t a measure of success, one of AST’s foundational patents aims to solve the problem of delaying the synchronization of hundreds of transactions on mobile devices with satellites traveling at a staggering 17,000 mph. An agreement signed with Nokia last year to support LTE and 5G terrestrial connectivity with an enhanced AirScale Single RAN platform also indicates the technological strengths and depth of AST SpaceMobiles’ partnership.
Avellan has laid a solid foundation for AST SpaceMobile. What I find compelling about the company’s vision is that it’s rooted in a direct-to-device connection, unlike Starlink’s focus on fixed-point broadband services. However, Starlink appears to go beyond this goal, considering it now also offers a mobility solution for recreational vehicles.
So far, AST SpaceMobile has launched two LEO satellites that integrate phased-array and digital beamforming technologies to focus and locate signals more accurately. However, more satellite launches are planned in the future. AST SpaceMobile has also signed agreements and arrangements with more than 35 mobile network operators globally, including AT&T in the United States, and the company is happy to act as a wholesaler to provide connectivity gap coverage. This gives AST SpaceMobile a distinct advantage over Starlink in driving scale and adoption; the wholesale approach will allow it to serve a broad swath of operators to monetize services, including fixed wireless access broadband, where Starlink is a direct competitor.
So, the million dollar question is: who will win the LEO satellite space race? It is still early; I have an informed guess. The competition between Starlink, AST SpaceMobile and others including OneWeb will generate innovation, but I will give the edge to AST SpaceMobile long-term, given its technology and carrier partnerships, intellectual property, and timely decision to link its satellite communications directly to the cellular device. The company’s go-to-market strategy, which leverages existing terrestrial cellular infrastructure and an install base of millions of mobile devices, is also compelling, in contrast to Starlink’s plan to deliver and monetize fixed access services on small scale.
Perhaps the most powerful evidence suggesting AST SpaceMobiles’ potential to lead in LEO was the first smartphone-to-satellite call, made in April on a Samsung device on the AT&T network. The latter is a stunning achievement that eclipses emergency text message support. One thing is absolutely clear to me: LEO satellite connectivity will play an important role in bridging the digital divide for nearly three billion people worldwide who lack internet access. I will be fascinated to see how the competition plays out in this market as that vision becomes a reality.
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