During the 20th century, the US and the Soviet Union raced each other to get astronauts off the ground and into space. Here in the 21st century, two startups are in a race to beam Internet connections from their satellites in space to regular, existing cellphones on the ground.

At stake are hundreds of millions of dollars in investment money, alongside technology both companies promise will transform the world's $1 trillion mobile industry. After all, they're both offering a service that would essentially eliminate cellular dead zones by connecting any existing cellphone to a satellite if it moves beyond the reach of an operator's terrestrial 4G or 5G network. That's a critical development considering all transmissions from satellites today require specialized receivers that are often bulky and expensive.

However, just like the space race of the 20th century, today's race to connect cellphones to satellites includes a fair amount of intrigue, as well as a healthy dose of techno-rhetoric.

SpaceMobile
The new space race took off in earnest earlier this month in the form of a $110 million Series B round of funding funding into AST & Science's SpaceMobile effort. More important than the sizable sum were the big names attached to it: Japan's Rakuten, Europe's Vodafone, cell tower giant American Tower, real estate company Cisneros and Samsung's venture capital arm, Samsung Next.

The funding brings AST & Science's total financing war chest to $128 million.

So what is all that money going to? AST & Science Founder Abel Avellan – who also participated in his company's latest funding round – declined to answer any questions from Light Reading beyond a press release issued by Vodafone.

In the release, Avellan said that SpaceMobile – the low-latency, low Earth orbit (LEO) satellite network that AST & Science is building for the effort – will "eliminate the coverage gaps faced by today's five billion mobile subscribers moving in and out of connectivity every day."

AST & Science added that it has already successfully tested its technology via its BlueWalker 1 satellite that launched in April.

Although he didn't respond to questions from Light Reading, Avellan told SpaceNews that NanoAvionics, a Lithuanian satellite company backed by AST & Science, is building the company's satellites in its manufacturing facility in Texas. He said AST & Science's immediate focus is to start making money in the next few years with a few dozen LEO satellites. Avellan added that the company would need more money to reach that goal.

Importantly, SpaceMobile is boasting that its proprietary technology can connect to any existing cellphone in any location – even those inside buildings.

And when exactly will SpaceMobile launch service? "We are letting our mobile-network-operating partners publish their own service dates, but we can say it will be in the next few years," the company says on its website.

Lynk
The other main competitor in today's space race is Lynk, which launched at last year's MWC Barcelona trade show under the name of UbiquitiLink.

Charles Miller, Lynk's CEO, told Light Reading his company has raised just $12 million in venture funding so far from the likes of Avonlea Capital, Unshackled Ventures and RRE Ventures. He said that more than two dozen mobile network operators all over the globe are testing the company's technology, but he declined to name any of them.

However, Light Reading reported last year that Smith Bagley Inc., a tiny wireless network operator offering services under the Cellular One brand in eastern Arizona, was testing the company's technology.

And based on a new, heavily redacted filing by Lynk with the FCC, it appears Smith Bagley has agreed to participate in Lynk's newest tests. Per the filing, Lynk is testing transmissions from its satellites to existing GSM phones in the 700MHz to 900MHz range.

And Lynk is preparing to embark on more testing. The company's fourth prototype flew to the International Space Station (ISS) last week aboard the SpaceX Dragon resupply spacecraft, where ISS astronauts are scheduled to attach Lynk's satellite prototype on the Northrop Grumman Cygnus automated cargo spacecraft. Lynk is then scheduled to transmit test signals from May to November 2020.

SpaceNews reported that Lynk plans to kick off a constellation of thousands of satellites but start with an initial 30-satellite constellation. The company declined to say when it might begin offering commercial services from its satellites.

Lynk's Miller said the company plans to initially offer voice and messaging services to cellphones, but would eventually offer data services as well.

A global satellite roaming partner
Importantly, both SpaceMobile and Lynk are pursuing the same business plan. "AST will sell SpaceMobile airtime to mobile operators under a wholesale business model. The operator will, in turn, offer expanded and/or new connectivity plans to ​their subscribers," SpaceMobile explains on its website. Lynk's Miller described an almost identical business plan.

Thus, the two companies would essentially act like space-based roaming partners for terrestrial 4G and 5G network operators. That would make sense for a company like Smith Bagley, which undoubtedly already has roaming agreements with big US wireless network operators like AT&T and Verizon so that its customers remain connected when they venture outside of Smith Bagley's own network footprint. Although wireless carriers rarely discuss their roaming partners and the details of their roaming agreements, typically they pay their roaming partners a set fee based on how much their customers roam onto those partner networks.

And Smith Bagley would likely be keen to do business with a Lynk or SpaceMobile considering it could then offer its customers – who live in the rural areas of eastern Arizona – coverage anywhere they go. While city folk might not appreciate that offer, Americans in rural areas would undoubtedly pay extra for the assurance that they would be able to make an emergency call if their pickup broke down on a back road or they twisted an ankle deep in the backwoods.

"We believe SpaceMobile is uniquely placed to provide universal mobile coverage, further enhancing our leading network across Europe and Africa – especially in rural areas and during a natural or humanitarian disaster – for customers on their existing smartphones," explained Vodafone Group CEO Nick Read in a statement about the operator's SpaceMobile funding.

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano