According to SpaceMobile, AT&T is putting the final touches on an agreement with the startup that could allow the operator to connect its customers' existing phones directly to SpaceMobile's satellites. If the service works as promised, the result could essentially eliminate all of AT&T's 4G and 5G dead zones with the flip of a switch.

A partnership between AT&T and SpaceMobile has significant implications for the global wireless industry. First, given AT&T's interest in the topic, it signals the technical possibility of connecting customers' existing cellphones directly to low-Earth orbit (LEO) satellites. Due to spectrum regulations and technological limitations, standard cellphones today connect to cell towers located on the ground, which thus limits operators' coverage to areas to only those locations where signals from those towers can reach. And while companies like Iridium and Globalstar do sell portable phones that can connect directly to their satellites, they do so using their own spectrum bands and their phones are often bulky and expensive.

SpaceMobile's proposition would turn this whole situation on its head by beaming connections from satellites inside of wireless operators' existing spectrum bands. The company said its agreement with AT&T would allow it to transmit signals in the operator's AWS, PCS and WCS spectrum bands. Thus, AT&T's customers wouldn't have to purchase a new phone to connect to SpaceMobile's satellites because SpaceMobile would be transmitting in the same spectrum bands that AT&T is already using.

But an agreement between AT&T and SpaceMobile has implications beyond just the operator's dead zones. If phones like those from AT&T could connect to satellites, would that impact satellite providers like Iridium and Globalstar? And would it slow AT&T's efforts to construct 4G and 5G networks in rural areas?

SpaceMobile certainly appears aware of these issues considering the company is petitioning the FCC to make its service eligible for the agency's $9 billion 5G Fund. "The mobile-satellite-based enhancement would allow essential service to be provided where a financial case cannot be made, even with 5G Fund support, to deploy expensive terrestrial cell sites and backhaul facilities," SpaceMobile wrote in a recent FCC filing. "This will alter the economic equation that has left behind these hardest to serve areas."

SpaceMobile's plans
SpaceMobile, the go-to-market brand from Midland, Texas-based startup AST & Science (AST), disclosed its pending partnership with AT&T in a recent FCC filing. "AST currently has a Teaming Agreement in place with AT&T and is finalizing a Memorandum of Understanding with AT&T that details and describes roles and responsibilities, commercial framework, and the frequencies that will be used by both the BlueWalker 3 test satellite and the commercial SpaceMobile constellation," the company wrote earlier this month. "Currently, AST has an experimental license that permits the use of AT&T's Band 5 spectrum for testing on its first test satellite, BlueWalker 1."

SpaceMobile declined to comment on its relationship with AT&T, and an AT&T representative said the company cannot comment on speculation.

SpaceMobile emerged earlier this year with the announcement of a $110 million Series B round of funding from Japan's Rakuten, Europe's Vodafone, cell tower giant American Tower, real estate company Cisneros and Samsung's venture capital arm, Samsung Next.

In an April filing with the FCC, AST laid out its SpaceMobile ambitions. "AST's [satellite] constellation will bridge the rural digital divide, helping carriers fulfill their nationwide 5G coverage obligations, even in places without terrestrial infrastructure," the company wrote.

"AST will accomplish this by working with carriers to ensure that, where a customer device cannot connect to a wireless carrier's terrestrial basestation, it can still access the network via AST's satellite system. This arrangement allows carriers to augment and extend their coverage by using their own spectrum resources without having to build towers or other infrastructure where it is not cost-justified or is difficult due to environmental challenges," the company wrote in its filing. "It also allows carriers to maintain services to customers during emergencies where events interrupt the operations of their terrestrial networks, as the AST technology requires very little terrestrial infrastructure. This proposal requires no grants of new spectrum, nor any involuntary spectrum sharing: instead, it expands the utility of already licensed spectrum, without causing harm to other users, in large part because the same licensee engages in satellite-terrestrial coordination."

SpaceMobile launched its first satellite, BlueWalker 1, in 2019. It plans to launch BlueWalker 3 in 2021 for additional testing. The company said it ultimately wants to launch 243 LEO satellites. SpaceMobile said it plans to launch "initial portions" of its satellite constellation by 2021, "with the complete constellation for US coverage launched and operational by early 2023."

In terms of potential customers, SpaceMobile said it has "secured partnership agreements with almost a dozen global mobile network operators to offer services in conjunction with their networks" for 4G and 5G. The company also hinted at work with unnamed partners.

A report from earlier this year pointed out that Apple CEO Tim Cook is personally interested in a research project at the company that would use satellites to bypass terrestrial wireless networks.

SpaceMobile has said it will sell airtime on its satellites to mobile operators under a wholesale business model.

Questions remain
However, SpaceMobile hasn't provided any details on exactly what kinds of services its satellites will provide. But in the company's FCC filings, the company appears to have grand ambitions beyond simply providing voice and texting service to existing phones.

"Beyond the capacity to provide for direct communications for first responders, fast and reliable satellite broadband can serve as back-up to wireless networks during disasters and support first responder IoT solutions as well as the operation of Unmanned Aircraft Systems (UAS)," the company wrote. "AST's SpaceMobile network will ensure that first responders can connect to their colleagues and to the wireless network, supporting voice, video and data regardless of location or the functionality of the terrestrial network. SpaceMobile will provide the same end-user experience and high-quality broadband coverage for rural responders as what is available to those in urban areas."

That's far grander than what is promised by Lynk, a rival satellite startup with a similar plan. Lynk executives earlier this year said the company plans to initially offer voice and messaging services to cellphones from its own satellites, but would eventually offer data services as well. Light Reading reported last year that Smith Bagley, a tiny wireless network operator offering services under the Cellular One brand in eastern Arizona, tested Lynk's technology.

SpaceMobile faces significant hurdles, though. The first of which will be obtaining FCC approval for its services. The government agency is in part charged with preventing companies like SpaceMobile from transmitting signals that could create interference to other spectrum licensees.

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