As the internet has become an integral part of our lives, the pursuit of uninterrupted connectivity has led us to look skyward, ushering in the era of non-terrestrial networks (NTNs).
These space-based cell towers promise to deliver messaging, data, and call support from above, capturing the attention of mobile network operators (MNOs) and original equipment manufacturers (OEM) phone manufacturers alike. The integration of terrestrial and NTNs aims to ensure that users are never without a signal.
Satellite operators such as Starlink and AST SpaceMobile are at the forefront, securing numerous agreements with MNOs. Meanwhile, technology giants like Apple, Google, and Huawei are also seeking to establish their presence in the field.
There are two distinct approaches to achieving device-to-device (D2D) communication. The first approach involves using the operator’s licensed spectrum, which is beamed down from space. This method is favoured by mobile operators, Starlink, and AST SpaceMobile, among others.
The second approach utilises standardised satellite bands that are supported by chips through the inclusion of standardising bodies such as the 3GPP. This method is adopted by Apple in collaboration with Globalstar and is preferred by the Mobile Satellite Services Association (MSSA).
An Apple way of keeping the operators away
Apple’s 20% stake in Globalstar signals significant developments. This move revives Steve Jobs’ early vision of using an unlicensed Wi-Fi spectrum to replace carriers, a concept he abandoned in 2007 with the first iPhone’s release on AT&T. While Apple’s future plans remain unclear, the potential for an Apple-exclusive network could bypass conventional operators, directing the monetisation of the “always connected” service directly to Apple.
However, Apple’s intentions remain ambiguous, as they have enabled iPhones with T-Mobile plans to participate in Starlink beta tests and recently updated their satellite support page to state, “Your network provider may also provide satellite features”. Notably, 85% of Globalstar’s capacity is allocated to Apple.
Google’s approach is different. The Pixel offers SOS satellite connectivity in collaboration with Skylo and Garmin, which is free for the first two years, after which a subscription will be required. Android officially supported satellite messaging starting with the Android 15 release, but this service requires carrier support. Android 16 is expected to have additional support when the final version is released around mid-2025.
In contrast, Huawei made headlines in 2023 by announcing that the Mate 60 Pro was the world’s first phone with a satellite calling feature, which utilised China’s Tiantong satellite system. Huawei seemingly took things further by launching its own satellites, although details about this development remain scarce.
Monetisation prospects for NTNs
MNOs have high hopes pinned on NTNs. AST SpaceMobile counts AT&T, Google, Rakuten, Verizon, and Vodafone among its investors. As for monetisation, it is still early to determine how successful it’ll be, and the recently launched T-Mobile Starlink service would serve as the bellwether.
The service costs $15/month per line or $20/month for Verizon and AT&T customers. As for people’s willingness to pay for it, consumer surveys in the area are limited, but a GSMA Intelligence survey in June 2024 found that 40% of respondents were unwilling to pay more on top of their existing mobile spend, while 32% would only pay up to 5% extra.
Common sense suggests adoption will be higher in remote areas with poor coverage.
SpaceX’s letter to the FCC last year on their T-Mobile test touted success “in urban and rural areas, indoors and outdoors, and under tree cover”. Independent tests confirmed that messaging services can work indoors.
The monetisation potential extends beyond mere “add-ons.” NTNs could halt future rural cell tower deployments, benefiting MNOs by reaching new customers while saving on capital expenditures. There are also implications for fixed wireless access investments, which may overlap with some MNOs’ strategic plans.
