How Elon Musk, SpaceX, and T-Mobile are helping the satellite-to-cellular business

On Thursday, Elon Musk got on stage with T-Mobile CEO Mike Sievert to announce that SpaceX is working with the carrier to completely eliminate cellular dead zones. The companies claim that next-generation Starlink satellites, set to launch next year, will be able to communicate directly with phones, letting you text, make calls, and potentially stream video even when there are no cell towers nearby. What’s more, Musk promised all this is possible with phones that people are using today, without consumers having to buy any extra equipment.

It’s a bold proclamation from the carrier — Verizon and AT&T don’t offer anything like it. However, SpaceX and T-Mobile aren’t the only companies looking to use satellites to directly communicate with cell phones using existing cell spectrum. For years a company called AST SpaceMobile has promised that it will beam broadband to phones from space, and a company called Lynk Global has already demonstrated that its satellite “cell towers” can be used to send text messages from regular phones. It’s easy to imagine that these companies would be afraid that two giants were suddenly looking to get in on a similar game — but it turns out that’s not the case at all. They actually seem delighted.

Who’s competing with SpaceX and T-Mobile in satellite-to-phone tech?

“We love the validation and the attention that this is bringing to this technology,” said Lynk’s CEO, Charles Miller, in an interview with The Verge. “We’ve been getting all kinds of calls of carriers today who are like ‘help us!’”

Image: Lynk

Lynk’s initial goal is similar to SpaceX’s — it’s partnering with a number of carriers around the world to let their customers send texts using a satellite network it’s currently in the process of building. Like T-Mobile’s presentation, Miller especially stressed the tech’s importance during emergencies and natural disasters, where things like hurricanes, wildfires, flooding, or earthquakes can take down traditional cell networks. “It’s resilience. It’s instant backup working for everybody on Earth. Your phones, even though the towers are down, can communicate,” he said. “This will save lives.”

Miller’s pitch is very similar to Sievert’s and Musk’s, but he doesn’t seem particularly worried about competing in the same space (pun intended) as them. Part of his confidence comes from Lynk being an early leader in the market — it claims that in early 2020, it became the first to send a text message to an unmodified cell phone from space. “We think there’s going to be more big companies jump in. They have years and years to go. They’re years behind us,” he said. “We’re going to be like ‘wonderful! Educate the world that this technology is done.’ And when we start rolling it out at the end of this year, people are going to go, ‘I want it.’ They’re not going to want to wait years for it.”

Scott Wisniewski, the executive vice president and chief strategy officer at AST, echoed a similar sentiment. “Our CEO actually tweeted, and he said we’re happy that they’re focusing on this real big market and this real big need. And it was comforting to hear folks say things like the technology works for them,” he said. He also predicted that the market for satellite-to-phone communication likely wouldn’t be winner-take-all. “In terms of the overall market, it will be multiple winners in our view.”

AST’s service is perhaps more ambitious than what T-Mobile announced. Sievert said that he hopes T-Mobile will someday be able to deliver data via SpaceX’s satellites, where AST’s express goal is to operate 4G and 5G networks. It’s betting that the idea of broadband will be more appealing than just being able to text and make calls from remote locations. “We all really understand that phones can go out of service quite frequently, or coverage can be poor. And that was a point that was highlighted by T-Mobile. So our solution is really attractive in that regard,” Wisniewski said.

Where SpaceX and T-Mobile’s plan is largely limited to the US and its territories — the wireless spectrum SpaceX is using for its service is owned and operated by other carriers and agencies internationally, so additional deals are necessary for it to work anywhere outside the US — AST and Lynk have global aspirations. AST has gotten investment and a five-year exclusivity deal with Vodafone, one of the world’s largest cell providers, and has also received investment from Rakuten, a mobile carrier in Japan. Miller says that Lynk’s testing its service in 10 countries “as we speak” and is capable of providing it in dozens more.

Even the timing of T-Mobile and SpaceX’s announcement is perfect for AST and Lynk, as they tell it. The former is getting ready to launch a test satellite in just a few weeks (with five more slated for 2023), and the latter is planning on launching its commercial service with 14 network operators by the end of the year. If there was ever an ideal time for consumers to become very interested in exactly the thing you’re working on, right as you’re about to take a big first step might be it.

How Apple and iPhone 14 rumors fit into this puzzle

Tim Farrar, an analyst at satellite and telecom-focused consulting and research firm Telecom, Media and Finance Associates, however, thinks T-Mobile’s timing could be because another huge competitor is about to enter the market — one that could have advantages that AST, SpaceX, and Lynk don’t. “The issue is going to be what happens with Apple next week,” he said, referring to rumors that the next iPhone may be able to communicate with the Globalstar satellite network for emergency purposes.

If that happens, he says, iPhone users might get this feature very soon, and in a version that includes international support from the start. “I think what’s likely is if Apple does announce something next week, it will be something that’s ready to go as soon as the phone’s available. Because if they’re partnered with Globalstar, Globalstar already has 24 satellites operating in space that you can communicate with, and they have the licenses with the FCC and many other international jurisdictions.”

That last part is particularly important. All Apple has to do, according to Farrar, is get equipment authorization from the FCC through a “simple and well-defined” process, and it’s off to the races. For the other companies — including SpaceX — who want to transmit from space using spectrum that’s licensed by cell carriers, it’s not so easy. Historically, satellites used satellite spectrum, and cell towers used terrestrial spectrum. But Farrar says that satellite-to-cell tech mixes the two in a way that the rules currently don’t really allow for. “It’s a big regulation change for the FCC to make. And it’s something they’ve been considering for two years and not really reached a resolution.”

T-Mobile’s carrier competitors may even try to look for a way to prevent SpaceX from using the carrier’s spectrum, which could complicate things further. “There’s going to be a lot of fighting over use of terrestrial spectrum on satellite,” Farrar said. “There have already been interference concerns expressed when AST was looking to partner with AT&T to trial their system. None of the major wireless carriers want their rivals to gain the advantage. So clearly, people will protest any application for use of T-Mobile spectrum on satellites. And the FCC will have to make a decision that, which may not be reached very quickly.”

Indeed, Miller wouldn’t really talk about spectrum, saying that Lynk has “an open issue” with it. Wisniewski said that one of AST’s plans for dealing with spectrum issues is to work with carriers to get approval from regulators. He also said that the nature of providing service where there currently isn’t any could make things a bit easier. “We share the spectrum with mobile network operators on a noninterference basis in places where they don’t have towers.”

While AST has regulatory approval for commercial operation in seven countries, according to Wisniewski, the FCC has only authorized it to test its satellite to provide service to the US on an experimental basis.

As for SpaceX and T-Mobile, their plans are quite a ways out, giving the companies time to try and work things out with regulators — they don’t expect to even start testing their service until the end of next year.

If one company can break through with a phone that connects to satellite networks, though, it could potentially help all the other companies out. For example, if Tim Cook gets on stage on September 7th and announces that you can send emergency satellite messages from the iPhone 14, a lot of people who don’t use iPhones are going to get real jealous real fast. That could add to pressure on the FCC to authorize the satellite-to-phone tech for carriers and their satellite communications partners. And if T-Mobile has it, you know AT&T and Verizon will be making some calls. (Farrar thinks that other handset makers that don’t have as much clout as an Apple or a Samsung would have a difficult time introducing a similar feature — carriers could fight them, arguing that their phones should just use the carrier’s satellite capabilities instead.)

Verizon specifically does actually already have an agreement for satellite connectivity, though in a different form. It’s partnered with Amazon’s Kuiper project, which aims to create a satellite constellation similar to SpaceX’s. Instead of doing direct satellite-to-phone communication, though, Verizon’s plan is to feed remote cell towers with satellite service instead of having to run fiber or cable to them. During the event on Thursday, Sievert did say that T-Mobile was open to the possibility of doing something similar with SpaceX.

Neither Verizon nor Amazon responded to The Verge’s request for comment on whether they’d be modifying their plans based on T-Mobile and SpaceX’s announcement.

As for AST and Lynk, neither company is particularly interested in competing on that front. “You don’t need to build these remote cell towers if your phone’s already connected by the satellite,” said Miller.

Elon Musk let the satellite-to-phone cat out of the bag

At this point, there’s really only one thing that seems totally clear: T-Mobile and SpaceX have let a genie out of the bottle. They announced loudly, that soon your phone will be able to connect to satellites, letting you have at least some level of communication even when you’re in areas that have traditionally been completely isolated.

There are a lot of ways things could play out from here — AST’s tests could show that, yes, you really can beam relatively fast internet to phones from space and raise the bar for what consumers want higher than where T-Mobile and SpaceX have set it. Or maybe regulators could suddenly figure things out, letting Lynk swoop in before T-Mobile gets out of beta. And, of course, there’s always the possibility that everyone gets caught in a huge regulatory mess, letting Apple come in and do its own thing with a completely different kind of technology.

Whatever ends up happening, though, people know now it’s possible for the phones currently in their pockets to talk to a satellite. And like Miller said, now that I’ve seen it and know that the technology is on its way soon, I want it — no matter which satellites my phone has to talk to.